Types of Liabilities definitions Flashcards
Types of Liabilities definitions
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Current Liabilities Obligations that must be settled within one year, often covering routine business expenses and short-term debts. Accounts Payable Amounts owed to suppliers for goods or services received but not yet paid, representing day-to-day operational debts. Accrued Expenses Liabilities from expenses incurred but not yet paid, typically recorded through adjusting entries like salaries or interest. Salaries Payable Amounts owed to employees for work performed but not yet paid by the end of an accounting period. Interest Payable Unpaid interest costs that have accumulated on borrowed funds and are due in the near future. Taxes Payable Obligations for taxes that have been incurred but not yet remitted to tax authorities. Unearned Revenues Advance payments received from customers for goods or services not yet delivered, creating an obligation to perform. Deferred Revenues Alternative term for unearned revenues, representing customer payments received before earning the related income. Payroll Liabilities Employer obligations related to employee compensation, including taxes and benefits such as social security and health insurance. Current Maturities of Long-Term Debt Portion of long-term loans that must be repaid within the current year, such as upcoming mortgage payments. Long-Term Liabilities Obligations not due within one year, often involving significant financing arrangements like loans or bonds. Notes Payable Formal written promises to repay borrowed money, usually from banks, often with interest and over periods longer than one year. Bonds Payable Debt instruments issued to multiple lenders, allowing organizations to raise large sums by borrowing from many investors. Customer Deposits Funds received from customers in advance, creating a liability until the related goods or services are provided.
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