Liability
Liabilities are obligations to pay money or provide goods or services in the future, such as supplier bills, wages owed, loans, and customer advances. They normally carry credit balances.
Example
A $300 unpaid supplier bill is a liability (Accounts Payable).
Learn and practice it
The five account types — Assets, liabilities, equity, revenue, and expenses — what each account type means, with clear examples and a classification drill.
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