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

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.