Liability is a obligation, debt or responsibility by an
individual or company to substitutes cash or other assets to pay something for company’s
operating activity. The classifications of liability are Current Liability and
Long Term Liability.
Current liability is a company's obligation that is due
within one year or within the company's operating cycle. Current liabilities
include note payable, account payable, prepaid revenues, deviden revenues,
salaries, etc.
Meanwhile, Long Term Liability is a company's obligation that
is due more than one year or more than the company's operating cycle. The
examples of long term liability are bonds payable, bank loans, mortgages, etc.
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