Liabilities

Liabilities stand for the amount of money the company owes. In other words, all of the claims against a company are its liabilities; see the list below:

• the capital subscribed by shareholders,
• shareholders' funds which have been put into reserves,
• loan capital outstanding and short term items such as trade creditors,
• bank loans,
• declared dividends,
• tax payments due and so on.

For accountants, liabilities are something abstract which appear in a balance sheet and their total has to be equal to the company's assets.

Last Updated: November 2007 © Moneyextra.com

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