Types of Liabilities

Current liabilities Current liabilities are debts currently owed for taxes, salaries, interest, accounts payable* and notes payable, that are due within one year.

A company is considered to have good financial strength when current assets exceed current liabilities.

Accounts Payable Accounts payable is one of a series of accounting transactions covering payments to suppliers whom the company owes money for goods and services. Therefore, you will often see accounts payable on most balance sheets.

Long-term debt is a long-term loan, for a period greater than one year. These debts are often paid in installments. If this is the case, the portion to be paid off in the current year is considered a current liability.