Liabilities section

This comprises the following amounts owed by the business to outside parties:
(a) Current liabilities—these include all liabilities which are due and payable within 12 months. Examples include creditors, bank overdrafts and sales tax payable.

  • Accounts payable
    This is comprised of all short-term obligations owed by your business to creditors, suppliers, and other vendors. Accounts payable can include supplies and materials acquired on credit.

  • Notes payable
    This represents money owed on a short-term collection cycle of one year or less. It may include bank notes, mortgage obligations, or vehicle payments.

  • Accrued payroll and withholding
    This includes any earned wages or withholdings that are owed to or for employees but have not yet been paid.

  • Total current liabilities
    This is the sum total of all current liabilities owed to creditors that must be paid within a one-year time frame.

(b) Deferred liabilities—these are liabilities which are not due and payable within a 12-month period. Examples include mortgages and long-term loans.

  • Long-term liabilities
    These are any debts or obligations owed by the business that are due more than one year out from the current date.

  • Mortgage note payable
    This is the balance of a mortgage that extends out beyond the current year. For example, you may have paid off three years of a fifteen-year mortgage note, of which the remaining eleven years, not counting the current year, are considered long-term.