Current Liabilities

What are Current Liabilities?

Current liabilities are those that must be paid within the coming 12-month period.

How it Works

A business will have liabilities.

Liability accounts show money the business owes to others.

They  are divided into current liabilities and non-current liabilities.

Current liabilities are those that must be paid in the coming 12-month period. 

​Accounts payable is a current liability.

Suppliers usually require payment within 3 months but certainly within 12 months.

Accrued expenses are also current liabilities. 

​Accrued expenses are expenses incurred during the accounting period but are yet to be invoiced. 

Regardless of the expense, the bill will need to be paid within the coming 12-month period.

A business may also have long term debt.

The portion due in the coming 12 months is also categorized as a current liability.

© R.J. Hickman 2020