Liabilities denote the amounts which a firm owes to others in future.They are the proprietors or creditors claim against the assets of the firm.Liabilities can be categorized into (a) short-term liabilities,(b) long-term liabilities.
(a)SHORT-TERM LIABILITIES
Liabilities which become due or payable within a year are known as current liabilities or short-term liabilities.Creditors of goods,bills payable and outstanding expenses are some of the examples of current liabilities.They are usually paid out of current assets.
(b)LONG-TERM LIABILITIES
Liabilities which are payable after period of one year are known as fixed or long-term liabilities.
debentures and mortgage loans are some of the examples of long-term liabilities.
(a)SHORT-TERM LIABILITIES
Liabilities which become due or payable within a year are known as current liabilities or short-term liabilities.Creditors of goods,bills payable and outstanding expenses are some of the examples of current liabilities.They are usually paid out of current assets.
(b)LONG-TERM LIABILITIES
Liabilities which are payable after period of one year are known as fixed or long-term liabilities.
debentures and mortgage loans are some of the examples of long-term liabilities.
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