Liabilities refer to the financial obligations or debts that a company or individual owes to others. This can include loans, unpaid bills, salaries and wages owed to employees, taxes, and other financial obligations.
Liabilities are recorded on a company’s balance sheet and are an important aspect of financial reporting and analysis. They represent the amount of money that must be paid in the future and can impact a company’s financial health and ability to meet its financial obligations. Liabilities are typically classified as either current liabilities (to be paid within one year) or long-term liabilities (to be paid over a longer period of time).