Liabilities

• present obligations resulting from past events and settlement which will cause an outflow from the resources of the enterprise. These are what the company or the business owes to its creditors. These are classified as current and non-current liabilities. 

  Liabilities
• are debts or obligations reasonably expected to be liquidated or paid in the normal course of the business’ operating cycle or paid within a period of one year by the use of current assets or by creation of other liabilities.  

  Current Liabilities
• a liability account used to record the purchase of goods or services on credit supported by the oral or implied promise to pay in the future.  

  Accounts Payable
• a liability account used to record the promissory note issued by the business to obtain a loan granted by a bank and other financial institutions.  

  Notes Payable
• represents income already collected but not yet earned.  

  unearned income
• a liability account used to record the liability for a loan from a bank or financing institution 

  loan payable
• a liability account used to record the utility consumption such as MERALCO, PLDT, and Maynilad for electricity, telephone and communication, internet connection and water services received from them. 

  Utilities Payable
• a liability account used to record the unpaid interest expense from the interest-bearing promissory notes issued by the business and other bearing loans contracted by the business intended for operation.  

  Interest Payable
• a liability account used to record the salaries expense already incurred but not yet paid as of the reporting period or the end of the accounting period.  

  Salaries Payable
• an account used to record unpaid taxes to the government as income taxes  

  Taxes Payable
• an account used to record the unpaid value added tax from the sale of goods and services. Output tax minus input tax equals VAT payable or refund.

  VAT Payable
• are long term liabilities or obligations which are payable for a period longer than one year such as long term notes payable, mortgage payable and bonds payable  

  Non-Current Liabilities
• a liability account used to record the promissory notes issued to the creditor with a maturity of more than a year 

  Long term note payable
• a liability account used to record an obligation secured by unencumbered property. Usually, a real property is used as a collateral in obtaining a loan  

  Mortage payable
• a liability account used to record the obligation incurred by issuing a long term-term bonds ranging from five to ten or twenty years supported by a formal contract. 

  bond payable