Liability?
Liability is the responsibility of the business. Means of liability that the amount we take for enhancement of our business scale. And we have to pay after some time. It is called liability. This amount has to be settled over a period of time. The liability amount is payable by the business.
The balance sheet has a separate column for liability. this column appears on the left-hand side of the balance sheet. Liability always appears in the balance sheet. However, It can be seen as a resource for company assets. Liability is also a part of the accounting equation.
Accounting Equation Of Liability:-
Liability = Assets - Capital
Normally, Liability Are two types:-
- Non-current liability and
- Current Liability
Examples of Liability
- Loan Payable
- Interest Payable
- Wages Payable
- Bill Payable
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