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