1.2 LIABILITIES Flashcards
1
Q
Liabilities
A
What the business owes
2
Q
Current liabilities
A
Short term debts <1year
3
Q
Current liability examples
A
Creditors
Bank overdraft
Short term loans
Expenses due
Revenues in advance
4
Q
Long term Liabilities
A
Owe <1 year
Money borrowed from others for a considerable period of time.
Or
Capital invested by the owner/ shareholders (includes retained profits)
5
Q
Long term liability examples
A
Long term loans
Capital (Share capital)
Net profit/ retained profit
6
Q
Long term liability examples
A
Long term loans
Capital (Share capital)
Net profit/ retained profit
7
Q
In a liability t account what does debit record
A
Any decrease in the amount owed by the business
8
Q
In a liability t account what does credit record
A
Records liabilities and Any increases (+) in liabilities
