What Are Current Liabilities And It's Types ?

These are financial obligations, which have to be settled within 12 months (with in 1 year). Also called as short-term liabilities. Examples : Short term borrowings, Rent etc.

What Are The Types of Current Liabilities ?

Current Liabilities constitutes of five line items. As follows..

1. Short-Term Borrowings : These are generally bank borrowings or debt borrowings.It can be secured or unsecured.

2. Accounts Payable or A/P : Money owed by the company to it's suppliers or other entity.It is opposite of accounts receivable.

It increases when the company receives a product or service, but choose to pay later.

3. Current Tax Liabilities : These are short term tax obligations that the company have to pay off within 1 year (12 months).

4. Other Current Liabilities (OCL) : These are residual current liabilities (generally of small amount) that do not meet the criteria of being classified separately.

It generally includes,

• advances from customers

• unpaid services and materials 

• Expenses payable

• Statutory dues