Liabilities

A liability is determined as an responsibility of an entity arising from previous dealings or activities, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of financial advantages later on.

There are two kinds of liabilities-
1. Long-term liabilities
2. Current liabilities
Long-term liabilities contain potential upcoming forfeit of financial advantages coming up from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer.
Examples:
►    Bonds payable
►    Long-term notes payable
►    Mortgages payable
►    Pension liabilities
►    Lease liabilities
Current liabilities are often recognized as all liabilities of the business that are to be resolved in cash within the fiscal year or the operating cycle of a given firm, whichever period is longer.
Examples:
►    Notes Payable
►    Accounts Payable
►    Unearned Revenue
►    Salaries Payable
►    Interest Payable
►    Taxes Payable