Explanation Liability Liability is an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liability or a non-current liability depending upon the time period in which it is paid. Explain the difference between current liability and long-term liability. Current liabilities Long-term liabilities Current liability is a kind of liability or the obligation of the business towards the creditors, in which the business is required to pay the creditors, within a period of one year or one operating cycle of the business, whichever is longer. Long-term liabilities are the obligations of the business that need not be paid within one year or within one operating cycle whichever is longer...

15th Edition

ISBN: 9781337955447

Author: WARREN/TAYLOR

Publisher: CENGAGE L

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the conting…

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Chapter 4, Problem 3DQ

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Explain the difference between current liability and long-term liability.

Solution Summary: The author explains the difference between current liability and long-term liability. Liability is an obligation of the business to pay to the creditors in future for goods and services purchased on account or any financial benefit received.

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Explain the difference between current liability and long-term liability.

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