What Are liabilities In A Balance Sheet ?

Liabilities are company's obligation to other entity, which the company is liable to write off in the future. In simple terms it is the borrowing or debt. For example : bank loans, payables, money raised through bonds etc.

What are the Different Types of Liabilities?

Liabilities are categorised on the basis of time period , the company enjoys it. It is of two types,

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

Current Liabilities play an important role in company's day to day activities. And it impacts working capital.

Working Capital = Current Assets - Current Liabilities

2. Non-Current Liabilities : Also called as long-term liabilities. These are financial obligations, which company is liable to pay off in more than 12 months (more than 1 year).

Examples : deferred tax liability, mortgage loan etc.

Contingent Liabilities : These liabilities are different from the above two. This is an off the balance sheet item. These are liabilities, which may arise in future. Refer Here