Notes payable: Sometimes, the company buys goods or receives services, but it will pay after one year.The company borrows these funds for a period greater than 1 year, so they appear as non-current liabilities in the company’s balance sheet. Long-term borrowings: The company raises funds to meet its capital expenditure by implementing strategic decisions that improve operational functions.Therefore, $1,000 is reported as a current liability.įollowing are some examples of non-current liabilities: For instance, the company has taken a term loan of $6,000, of which $1,000 is due for repayment within one year of the reporting period. Current portion of long-term debt: The company has a portion of long-term debt payable within one year.Therefore, we will report the $50 as unearned revenue until the goods are delivered. For example, a customer paid $50 in advance while ordering goods delivered after one month. Unearned revenues: The company has received customer advances for goods or services that are yet to be supplied.Accrued expenses: The company has unpaid expenses, such as rent and salaries payable, that it needs to pay within a year.Short-term debts: The company has borrowed funds from banks and other institutions, which must be repaid within one year.Bank overdrafts: The bank allows customers to overdraw amounts exceeding their available bank account balance.Accounts payable: The company owes a short-term obligation to its creditors who have provided goods and services on credit, and the company is yet to pay them within a year.The examples of liability are as follows: Current Liabilities Examples of non-current liabilities include long-term loans repayable after a year and debentures issued by the company. ![]() ![]() Non-current liabilities: The business expects to settle non-current liabilities over longer periods, typically exceeding one year from the reporting date.Current liabilities include accounts payable, short-term debts, notes payable, customer advances, and other similar obligations. Current liabilities: The business expects to settle current liabilities within one year from the reporting date.The liabilities of the business are primarily divided into two categories:
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