The current liabilities section of the balance sheet shows the obligations that your business will be paying in a year or less. As with the current assets section of the balance sheet, the current liability categories are listed in order of liquidity.
Below is a list of the typical liability categories, in order of liquidity:
- Accounts Payable – invoices your company incurs for day-to-day operational and general and administrative expenses.
- Current Income Tax Liabilities – payroll taxes and taxes due for the owners of your company.
- Short-Term Part of Loans and Notes Payable – in financial statements, loans are divided into two categories: (1) short-term balance due (due in next year), and (2) long-term balance due (balance due in more than a year).
- Other Current Liabilities – these are other obligations your company has, that are due in less than a year, that do not fit into the other short-term liability categories.
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