- Financial Advisory
- Financial Dictionary
In accounting terminology, the term Liabilities refers to debts incurred by a business in the course of borrowing activities or other financing situation. Liabilities are recorded on the company’s balance sheet.
For example, the Liabilities that will commonly be listed on a company’s balance sheet generally include items such as: taxes, wages, debts payable, accounts payable, accrued expenses and deferred revenues. Larger companies will also generally have long-term liabilities which would include the redemption of bonds and other debt instruments. Liabilities make up a key factor in the evaluation of a company and will help an investor determine if a company can continue operations successfully depending on the amount of liabilities and the payment terms on the balance sheet. In double entry bookkeeping, Liabilities are entered on the right side of the page.