Liabilities represent the obligation of the business towards creditors and their settlement is expected to result in an outflow of assets.
Liability Accounts List
Following are the common liability accounts:
- Accounts Payable: The amount that a business owes to outsiders, which is unpaid yet.
- Notes Payable: Money which the business owes to third parties which is represented by a written promise to repay at specified date and often bearing interest.
- Unearned Revenue: The money received in advance for a certain service or goods to be provided in future. Unearned revenue is listed as liability up to the point when the service or goods are provided thus finishing the liability and it is converted to revenue.
- Salaries/Wages Payable: The salaries that are incurred but are not yet paid to employees.
- Interest Expense: The amount of interest that is incurred on a note payable or bond is accumulated here and paid when due.
- Sales Tax Payable: Sales tax collected on sales but yet to be paid to tax collection authority.
- Other: Utilities Payable, Short-term Borrowings, Bonds Payable, etc.
Written by Irfanullah Jan