Liability refers to that amount which the individual or a company owes to outsiders and it has to be repaid on time otherwise it may lead to bankruptcy of individual or company. Given below are the examples of liability –
- Equity Share capital
- Preference Share Capital
- Bank Loan
- Debentures
- Unsecured Loan
- Bills Payable
- Outstanding Expense
- Unearned Revenues
- Sundry Creditors
- Provision for Taxation
- Proposed Dividend
- Claims not acknowledged as debts
- Guarantee or warranty
Out of the above the top 5 are long term liabilities while 6 – 11 are current liabilities and bottom 2 are called contingent liabilities.