The concept of current liabilities is as following: in accounting, current liabilities are often
understood as all liabilities of the business that are to be seled within the fiscal year or the
operating cycle of a given firm, whichever period is longer. The concept of long-term liabilities is
also as following: in accounting, a section of the balance sheet that lists obligations of the
company that become due more than one year into the future. Long-term liabilities include items
like debentures, loans, deferred tax liabilities and pension obligations.
The five examples of current liabilities consisting of the definition and example transactions are
shown below:
1. Account payable
This amount is owed to suppliers for products and services that are delivered but not paid for.
A firm bought a car from B firm on account at $30,000.
Car 30,000
Account payable 30,000
2. Unearned revenue
These are payments received by customers for products and services the company has not
delivered or started to incur any cost for its delivery.
ABC Service Co. receives $24,000 on December 31, 2012 for a one-year service agreement
covering January 1 through December 31, 2013, the entire $24,000 is unearned as of December
31, 2012.
Cash 24,000
