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Types of Current Liabilities in Financial Accounting
Current liabilities can be of several types: (1) obligations to pay cash to other entities, such as accounts payable, notes payable, and accrued liabilities; (2) obligations to provide other entities with goods or services for which payment has already been received, such as revenues received in advance; and (3) obligations to honor product warranties (guarantees). Examples of each are discussed next.
Figure 7.1 shows the current liabilities section of a recent balance sheet for an assumed Corporation, a firm doing business in the electronics, aerospace, and automotive components industries. The items and amounts shown in the exhibit are typical of those reported by business firms. The next section discusses the accounting and reporting issues associated with each major current liability shown on a corporation's balance sheet.
Figure 7.1 - Current Liabilities
Current Liabilities Topics
Managing Liquidity and Cash Flows
- Accounts payable
- Discounts in Current Liabilities
- Notes Payable
- Accrued Liabilities (Accrued Expenses)
- Current Maturities/Portion of Long-Term Debt
- Taxes Payable
- Accrued Restructuring Costs
- Advance Payments from Customers
- Obligations for Warranties
Commitments, Contingencies and Risks
