ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses. Liabilities can be contrasted with assets. Liabilities refer to things that you owe or have borrowed; assets are things that you own or are owed.

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: -In its simplest form, your balance sheet can be divided into two categories: assets and liabilities. Assets are the items your company owns that can provide future economic benefit. Liabilities are what you owe other parties. In short, assets put money in your pocket, and liabilities take money out!

Detailed explanation-4: -Liabilities are any debts your company has, whether it’s bank loans, mortgages, unpaid bills, IOUs, or any other sum of money that you owe someone else. If you’ve promised to pay someone a sum of money in the future and haven’t paid them yet, that’s a liability.