What are Current Liabilities?
Current Liabilities are debts on the balance which sheet that a business owes and needs to repay, usually within one year of the balance sheet date.
Current Liabilities Are Shown on the Balance Sheet
Current liabilities are included on the balance sheet, grouped together and called ‘Creditors: amounts falling due within one year‘. Here is an example:
The balance sheet doe not offer much information about who the business owes money to so a note is added to give some further detail:
Examples of Current Liabilities
Current liabilities are debts that need to be repaid within one year of the balance sheet date, here are some examples:
- Trade creditors;
- Bank loans (the portion repayable within one year);
- Bank overdrafts;
- VAT;
- PAYE.
