What is a Liability?
A liability is money the business owes to others, either individuals or other businesses or organizations.
How it Works
A business will have assets.
These are things the business owns—or money owed to the business.
A business will also have liabilities.
This is money owed to others.
For example, the loan account shows money owed to a lender.
The suppliers accounts show money owed to suppliers.
Money owed for tax is also a liability.
So, too, are accrued expenses, or likely expenses that are yet to be invoiced.
© R.J. Hickman 2020