💰Current liabilities are formed when a company buys goods and services on credit or receives short-term loans.
📅A current liability is an amount owed that is expected to be paid within one year of the balance sheet date or during the operating cycle, whichever is longer.
💻Accounts payable is the most common type of current liability, recorded when a business purchases goods or services from a vendor on credit.
🏦Short-term notes payable, wages payable, taxes payable, and unearned revenue are other examples of current liabilities.
📈The current portion of long-term debt is also classified as a current liability if it is due within one year of the balance sheet date.