Liabilities
Liabilities (alternatively known as debtors' equity) are obligations of a legal entity to its creditors. In other words, liabilities are the financial rights or claims of creditors to some assets that a legal entity currently owns. Liabilities come due in the future. They are made up of debts that the company owes to other legal entities. Liabilities may include accounts payable, loans and credit card balances; liabilities can be found on the balance sheet.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Liabilities. Obligations that come due in the future. Liabilities are the financial rights or claims of creditors to assets.
According to Principles of Economics by Timothy Taylor (3rd edition),
- Liabilities. Any amounts or debts owed by a firm or an individual.
Related concepts
- Bookkeeping. Recording, filing, and retrieving of financial data, as well as producing those financial reports that are required by laws.
