Explain what are Non-current liabilities and current liabilities

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As we know liabilities are financial obligations of the business to external parties which consists of two major categories namely:

  • Non-current liabilities and
  • Current liabilities

NON- CURRENT LIABILITIES

CURRENT LIABILITIES
  • Amounts owing by the business that are NOT REPAID WITHIN ONE YEAR.

 

  • Examples are Long term loan, Mortgage on Property and Debenture
  • Amounts owing by the business that are to BE PAID WITHIN ONE YEAR
  • Examples are short term loan, bank overdraft, creditors or accounts payable.

 

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