Accounting › Section K · Current liabilities › Topic K.1
Identifying and recording current liabilities
Bills from suppliers, tax collected from customers, deposits for work not yet done and next year's loan repayment are all debts that will soon need cash. Recording them correctly, and labelling them current, tells lenders whether a business can pay its way over the coming year.
In this topic
- Obligations coming due soon
- Where they appear
- Accounts payable and accrued expenses
- Sales tax payable
- Worked example: collecting and remitting sales tax
- Unearned revenue
- Worked example: gym memberships
- The current portion of long-term debt
- Worked example: classifying a loan
- Why the label matters
- Common mistakes to avoid
- Key takeaways
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