Liabilities
- It can be defined as a legal obligation to pay money to another person or business entity.
- It can be classified into three groups:
a) Long term liabilities:
- These liabilities are those which don’t require repayment during the current accounting period (more than 4 years).
b) Medium (Intermediate) term liabilities:
- Intermediate or medium-term debt is classified as debt that is due to mature in two to 5 years.
c) Current (Short) term liabilities:
- Current liabilities (short-term liabilities) are liabilities that are due and payable within one year.