Sign In

For the sake of quality, our forum is currently "Restricted" to invitation-only. In case if you wish to join our forum, please send an email seeking an invitation to "[email protected]".

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.

Captcha Click on image to update the captcha.

You must login to ask question.

What are Current Liabilities?

Current Liabilities

Obligations of a company which are payable within a year or an accounting cycle of a business are called current liabilities. They are either settled by current assets or by the introduction of new short-term liabilities.

Examples include Overdraft, Creditors, Short-term loans, Outstanding Expenses, etc. They are shown on the Liabilities side of the balance sheet.

Examples of Current Liabilities

They play a vital role in the control of the working capital of a business, WC = CA – CL, therefore, more of such short-term obligations mean less working capital and vice-versa. 

It is also the denominator when looking at a company’s current ratio thus playing an important part in its liquidity. It is imperative to keep a check on such short-term liabilities.


Current Liabilities in Financial Statements

They are shown in the liabilities section of the balance sheet.

Current Liabilities in Balance Sheet


Short Quiz for Self-Evaluation



 >Read Current Assets