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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Multiple Choice

Which of the following are the two main classifications of liabilities on a company's balance sheet?

Tangible liabilities and intangible liabilities

Operating liabilities and investing liabilities

Current liabilities and non-current liabilities

Short-term assets and long-term assets

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Verified step by step guidance

Understand the concept of liabilities: Liabilities represent obligations that a company owes to external parties, such as creditors or suppliers, and are reported on the balance sheet.

Learn the classification of liabilities: Liabilities are typically divided into two main categories based on their due dates—current liabilities and non-current liabilities.

Define current liabilities: Current liabilities are obligations that are expected to be settled within one year or within the company's operating cycle, whichever is longer. Examples include accounts payable, short-term loans, and accrued expenses.

Define non-current liabilities: Non-current liabilities are obligations that are not expected to be settled within one year or the operating cycle. Examples include long-term loans, bonds payable, and lease obligations.

Recognize the importance of classification: The distinction between current and non-current liabilities helps stakeholders assess the company's short-term liquidity and long-term financial stability.