What is a liability to you?

What is a liability to you is an asset to the party you owe. You can think of liabilities as claims that other parties have to your assets. On a company balance sheet, liabilities and assets are listed side by side. Liabilities are sorted into two general categories: current and long-term liabilities.

What do you need to know about liabilities?

Here’s everything you need to know about liabilities. What are liabilities in accounting? Liabilities are any debts your company has, whether it’s bank loans, mortgages, unpaid bills, IOUs, or any other sum of money that you owe someone else.

What is an example of a company's liabilities?

For example, if a company rarely uses short-term loans, it may group those with other current debts under an “other” category. The flip side of liabilities is assets — resources the company uses to generate income. Assets include inventory, machinery, savings account balances, and intellectual property.