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What are Liabilities? In what section of the accounting formula do Liabilities belong? Liabilities are claims against assets, meaning existing debts and obligations

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What are Liabilities? In what section of the accounting formula do Liabilities belong?

Liabilities are claims against assets, meaning existing debts and obligations. There are current liabilities and long-term liabilities. Current liabilities consist of notes payable, sales taxes payable, payroll and payroll taxes payable, unearned revenues, and current maturities of long-term debt. Long-term liabilities include bond basics, accounting for bond issues, accounting for bond redemptions, and accounting for long-term notes payable.

The balance sheet is divided into two sides and uses the accounting formula below:

the left side of the balance sheet and the right side of the balance sheet

Assets = Liabilities + Stockholders’ Equity

Work Cited:

Weygandt, Jerry, et al. Financial Accounting. Ninth Edition, Hoboken, NJ-United States, United States, Wiley, 2013.