BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Liabilities are the legal debts a company owes to third-party creditors. They can include accounts payable, notes payable and bank debt. All businesses must take on liabilities in order to operate and grow. A proper balance of liabilities and equity provides a stable foundation for a company.

Detailed explanation-2: -Debt is a type of liability. Hence, it is also recorded on the right-hand side of the balance sheet. In the balance sheet of a company, liability appears under two sub-categories, namely, current liabilities. They’re usually salaries payable, expense payable, short term loans etc.

Detailed explanation-3: -Comparing Liabilities and Debt The main difference between liability and debt is that liabilities encompass all of one’s financial obligations, while debt is only those obligations associated with outstanding loans. Thus, debt is a subset of liabilities.

Detailed explanation-4: -Current liabilities typically represent money owed for operating expenses, such as accounts payable, wages, and taxes. In addition, payments on long-term debt owed in the next year will be listed in current liabilities.

Detailed explanation-5: -Liabilities can be classified into three categories: current, non-current and contingent.