In a group discuss the different sources from which a business could borrow money and write them in the box below

Current Assets (CA) Fixed Assets (FA)

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Liabilities

 

Liabilities Liabilitiesrepresent all the money (debts) that a business owes at a particular time.

Even if a company has a lot of cash and other assets, it may not be in a good financial position if it has borrowed a large amount of money from other people or organizations. Accountants therefore pay careful attention to how much a business owes or what its liabilities are.

Do you have any liabilities? If so what are they?

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Current Liabilities Current liabilitiesare liabilities which are paid back within a period of one year. Long Term Liabilities Long term liabilitiesare liabilities which are paid back in a period longer than one year.

 

 

Match the following liabilities with their definitions and the say whether they are current liabilities (CL) or long term liabilities (LTL)

Liability	Definition
	mortgage		a	Money borrowed from the bank
	taxes payable		b	Money to be paid in the accounting period
	bonds		c	Property given as Security until debt is paid
	bank loan		d	A documentary promise to repay money
	accounts payable		e	Taxes to be paid in the accounting period