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In the business world, the terms “Debt” and “Liability” are used interchangeably and are understood to be the same. But in reality, they differ.
Debt
Debt is the money borrowed by a business entity which is to be repaid to the moneylenders at a future specified date.
For Example,
Liability
Liability is an obligation to render goods or services or an economic obligation to be discharged off at a future date.
For Example,
Key differences between Debt and Liability
Now, let me help you understand the differences between the two terms discussed above, debt and liability.
Particulars
Debt
Liability
Conclusion
All debts are liabilities, but not all liabilities are debts.