Liabilities are obligations of the company due to financial institutions, creditors, lenders, and vendors. Liabilities also include commitments to provide future services. Examples of liabilities include, accounts payable, notes payable, wages payable, taxes payable, and accrued expenses. Liabilities appear on the balance sheet of the company and equal assets minus equity.
Liabilities are separated into two categories, Current Liabilities, and Long Term Liabilities. Obligations that are due within the next year are classified as current liabilities.
For more information on the balance sheet, see the article “What is a Balance Sheet?”