Current liability
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| Accountancy | |
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| Key concepts | |
| Accountant · Bookkeeping · Trial balance · General ledger · Debits and credits · Cost of goods sold · Double-entry system · Standard practices · Cash and accrual basis · GAAP / IFRS | |
| Financial statements | |
| Balance sheet · Income statement · Cash flow statement · Equity · Retained earnings | |
| Auditing | |
| Financial audit · GAAS · Internal audit · Sarbanes-Oxley Act · Big Four auditors | |
| Fields of accounting | |
| Cost · Financial · Forensic · Fund · Management · Tax | |
In accounting, current liabilities are considered liabilities of the business that are to be settled in cash within the fiscal year or the operating cycle, whichever period is longer.
For example, accounts payable for goods, services or supplies that were purchased for use in the operation of the business and payable within a normal period of time would be current liabilities.
Bonds, mortgages and loans that are payable over a term exceeding one year would be fixed liabilities or long-term liabilities. However, the payments due on the long-term loans in the current fiscal year could be considered current liabilities if the amounts were material.
The proper classification of liabilities is essential when considering a true picture of an organization's fiscal health.
