Balance Sheet And Its Liabilities Side( Part 3 of 3)

WHAT ARE LONG TERM LIABILITES?

Long Term Liabilities:

• Is opposite of current liabilities which are more than 12 months from the date of the balance sheet.

Examples are:

• Long term debts /fixed term loan

Remember that we need to classify the total debts into two(2) parts:

• Current portion of long-term debts( amount owing within 12 months of balance sheet date and

• Non-current portion namely More than 12 months of balance sheet date

• Also, the current portion of the long term debts is to be classify as Current Liabilities whilst the non-current portion is in the Long Term Liabilities

SUMMARY: TO RECAP FOR LIABILITIES SIDE OF THE BALANCE SHEET

 

Balance Sheet And Its Liabilities Side (Total Liabilities) consists of :

Current Liabilities +Long Term Liabilities