WHAT IS A LIABILITY?

Liabilities are things that are owed by the business which are
the obligations or debts of the business. These could be classed as:

·        Non-Current liabilities

·        Current liabilities

 Non-Current liabilities are obligations that are owed by the business over a long period of time usually for longer than one year and these are also called long-term liabilities Examples include:

·        Long-term loans

·        Long-term credit facility arrangements

·        Long-term bond payable arrangements 

Current liabilities are things that are owed by the business over a short period of time usually for shorter than one year and these are also called short-term liabilities. Examples include:

·        Creditors

·        Short-term debts

·        Accrued expenses 

Your task:

Identify 3 differences between current and non-current liabilities