Concept explainers
(1)
Liabilities
Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.
Current liability
Current liability is an obligation that the companies need to pay from the remaining current assets or creation of other current liabilities within a fiscal year or the operating cycle whichever is longer.
Long-term liabilities are obligations that the company needs to pay after at least one year or more. Long term liabilities are otherwise called as long-term debt. Examples of long-term liabilities are long-term bonds, long-term notes payable and more.
To Identify: the current liability and long-term liability which are listed in Incorporation S December 31, 2017.
(2)
To Prepare: The liabilities section of balance sheet for Incorporation S on December 31, 2017.
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FINANCIAL ACCOUNTING: TOOLS WP ACCESS
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