Bills Payable: Sometimes suppliers do not give credit without any security.For example,В We usually pay the electricity Bill of March, in April. Outstanding Expenses: Outstanding expenses are the expenses whose services are availed but the payment is not yet made.Thus, until we supply or sell the goods, we need to treat the Advances as a liability. In case of failure to deliver the goods, we shall return the amount. It is the obligation of a business until it supplies the goods. Advances from customers: Some customers make the payment in advance for goods.Liability for such creditors reduces with the payment made to them. Creditors are the liability of the business entity. Sundry Creditors: Sundry creditors are the amounts payable to the suppliers of goods.A liability is classified as a current liability if it is expected to be settled in the normal operating cycle i. Short term liabilities are the liabilities which have to be redeemed in the near future.ДЇor example вЂ“ trade payable, bank overdraft, billsВ payable etc. Long term funds should not be utilized in running the day to day business operations. Usually, the business raises such funds to procure the fixed assets. The repayment of such loans is in installments over the tenure of such loan. A business can raise Long term funds by way of loans from banks, financial institutions. These are the obligations which are to be settled over a long period of time. Learn more about Financial Statements here in detail 3. Thus Accumulation of such Profits or losses increases or decreases the ownerвЂ™s equity or capital. Entities keep making profits and incurring losses year to year. Reserve and SurplusД«usiness is a going concern. Cash in hand cash at bank, building etc are the capital of a business.

The business cannot use its Fixed capital for day to day working of business activities. Working capital is the excess of an entityвЂ™s assets over its current liabilities. Thus, the capital of a business entity is classified as fixed capital and working capital. Therefore, Any contribution made by the owners by way of capital to the business is the liability.Д¬apital consists of all the fixed assets and current assets. According to the business entity concept, owners and the business are separate entities. Thus, owners can contribute Capital at the time of starting the business or even later as per the requirements of funds.

The capital of a business is the amount which the owner or owners of the business contribute.

Steps in the Process of Finalization of Accounts.

Let us discuss the liabilities on balance sheet in detail.

Balance sheet in quicken mac 2017