Current Liabilities

An entities debts and obligation that are due within one year or business cycle, whichever is longer. A liability is an obligation that is settled by a future forfeit of asset or opportunity; it is an unavoidable obligation; and the event that created the obligation has already occurred. Current liabilities are expected to be extinguished with current assets or the creation of other current liabilities.

Accounts Payable

Accounts payable are obligation owed for products or services that have been received but not yet paid for. They are bills that have not yet been paid, sometimes thought of as short term loans.

Accrued Expenses

Accrued expenses are wages, interest, taxes that have been incurred but not yet paid.

Notes Payable

Notes payable are written promises to pay a defined amount of money on a specified date. If the note is due in the current cycle it is classified as a current liability. If a portion of a note is due within the current cycle that portion is considered a current liability.

Dividends Payable

Cash dividends payable are classified as current liabilities during the period between the time they are declared and the time they are paid.

Unearned Revenues

Unearned revenues occur when a business receive cash for merchandise or service before delivery. In the period before delivery, the payment is a current liability.

Returnable Deposits

Returnable deposits are receivables from customers, that are credited to revenue as the service or merchandise is delivered. In the period before delivery, the payment is a liability current or non-current dependent on the expected time until deliver of the product.