Balance Sheet: Reporting Liabilities
A liability is a legal debt or obligation that arises during business operations. A current liability, such as accounts payable, is payable within one year. A noncurrent liability, such as bonds payable, long-term loan, and finance lease, is an obligation that is due in over a year. Financial statements are a central feature of financial reporting; a principal means of communicating financial information to those outside an entity. This course discusses generally accepted accounting principles (GAAP) for reporting liabilities, both current and noncurrent, on the balance sheet.