Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Struggling with Financial Accounting?

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Multiple Choice

In accounting, liabilities refer to ______.

revenues earned by a company from its primary business activities

obligations that a company owes to outside parties, which are expected to be settled through the transfer of assets or provision of services in the future

the total value of a company's assets

the owner's residual interest in the assets of the company after deducting liabilities

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Verified step by step guidance

Step 1: Understand the concept of liabilities in accounting. Liabilities are obligations that a company owes to external parties, such as creditors or suppliers, and are expected to be settled through the transfer of assets (e.g., cash) or the provision of services in the future.

Step 2: Differentiate liabilities from other accounting terms. For example, revenues refer to income earned from business activities, assets are resources owned by the company, and equity represents the owner's residual interest in the company after liabilities are deducted.

Step 3: Recognize common examples of liabilities, such as accounts payable, loans payable, accrued expenses, and unearned revenue. These represent amounts the company is obligated to pay or services it must provide.

Step 4: Note that liabilities are classified into two categories: current liabilities (due within one year, such as accounts payable) and non-current liabilities (due after one year, such as long-term loans).

Step 5: Apply this understanding to identify liabilities in financial statements, typically listed on the balance sheet under the 'Liabilities' section, separate from assets and equity.