what is a liability in accounting terms
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What is 'Accountant's Liability' DEFINITION of 'Accountant's Liability'. An accountant's legal liability while performing professional duties. An accountant is liable for a client's accounting misstatements. This risk of being responsible for fraud or misstatement forces accountants to be knowledgeable and employ all applicable accounting standards.
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What is the 'Accounting Equation' DEFINITION of 'Accounting Equation'. The equation that is the foundation of double entry accounting. The accounting equation displays that all assets are either financed by borrowing money or paying with the money of the company's shareholders.Thus, the accounting equation is: Assets = Liabilities + Shareholder Equity.The balance sheet is a complex display of this equation, showing that the total assets of a company are equal to the total of liabilities and shareholder equity.ny purchase or sale by an accounting equity has an equal effect on both sides of the equation, or offsetting effects on the same side of the equation. The accounting equation is also written as Liabilities = Assets – Shareholder Equity and Shareholder Equity = Assets – Liabilities. Next Up.
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Convert an XML file to a Web page Convert an XML file to a Web page. Open the document library that contains the XML file that you want to convert to a Web page. Point to the file name of the XML file that you want to convert, click the arrow that appears, and then point to Convert Document.pdate the XML file by using the Web page toolbar. Browse to the Web page that was generated from the XML file. Typically, you find the Web page in the Pages library of the site where you chose to create the page. Click Edit Page on the authoring toolbar.
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Definition of Unearned Revenue in Accounting Definition of Unearned Revenue in Accounting. Unearned revenue is the same thing as deferred revenue. In accounting, unearned revenue is a liability. It is a liability because even though a company has received payment from the customer, the money is potentially refundable and thus not yet recognized as revenue. Unearned revenue occurs when a company sells a good or service in advance of the customer receiving it.
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Definition of Unearned Revenue in Accounting by Jenifer Tuck, studioD. Unearned revenue is the same thing as deferred revenue. In accounting, unearned revenue is a liability. It is a liability because even though a company has received payment from the customer, the money is potentially refundable and thus not yet recognized as revenue. Unearned revenue occurs when a company sells a good or service in advance of the customer receiving it.
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What is a 'Liability' DEFINITION of 'Liability'. A company's legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
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Money Instructor Liabilities are not just loans. When you operate a business, and you have employees you will be responsible for payroll taxes that must be paid on that employee. These are known as payroll liabilities. Credit issued to your customer for defective products or services is a liability until the customer uses the credit. Accounts payable in a business are a liability. They’re not loans in the traditional sense, but accounts payable are accounts for which the vendor has extended your business credit purchasing terms.
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What is DEBT? As applied to the pecuniary relations of parties, liability is a term of broader significance than debt. The legal acceptation of debt is a sum of money due by certain and express agreement. Liability is responsibility; the state of one who is bound in law and justice to do something which may be enforced by action.
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What is a Liability Account? â Definition Liabilities are defined as debts owed to other companies. In a sense, a liability is a creditor's claim on a company' assets.In other words, the creditor has the right to confiscate assets from a company if the company doesn't pay it debts. Most state laws also allow creditors the ability to force debtors to sell assets in order to raise enough cash to pay off their debts.n a sense, a liability is a creditor's claim on a company' assets. In other words, the creditor has the right to confiscate assets from a company if the company doesn't pay it debts. Most state laws also allow creditors the ability to force debtors to sell assets in order to raise enough cash to pay off their debts.
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- An accounting expense (current liability) recognized on the company's books before it actually is paid for. Such expenses are typically periodic and are recorded on a company's balance sheet because of the high probability that they ultimately will be collected.
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- What is a 'Deferred Tax Liability'. A deferred tax liability is an account on a company's balance sheet that is a result of temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year.
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Liability Definition: Anything for which a company is legally bound or obligated, as to make good any loss or damage that occurs in a transaction . More than 80 million lawsuits are filed in U.S. courts annually. That doesn't mean your business will be the target of one, but it does suggest the need to evaluate your business's legal liability. As your business grows, you should occasionally reassess your exposure to liability claims.
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liability For example, if John hits Jane's car, John is liable for the damages to Jane's vehicle because John is responsible for the damages. In the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues.n the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues.
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- What is a 'Limited Liability'. Limited liability is a type of liability that does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies.
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liability For example, if John hits Jane's car, John is liable for the damages to Jane's vehicle because John is responsible for the damages. In the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues.
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Liability Law and Legal Definition Liability is generally a term that refers to a debt or obligation. In a financial sense, it refers to an organization’s or person's debts and other financial obligations.In insurance law, liability often is used to refer to blameworthiness that is used to apportion responsibility for repairing damage caused.Criminal liablility involves a determination of intent, unlike civil liability.n insurance law, liability often is used to refer to blameworthiness that is used to apportion responsibility for repairing damage caused. Criminal liablility involves a determination of intent, unlike civil liability.
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Liability (financial accounting) The following is a quotation from IFRS Framework: A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. — F.49(b)
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liability Definition of liability for English Language Learners. : 1  the state of being legally responsible for something : the state of being liable for something. : 2  something (such as the payment of money) for which a person or business is legally responsible. : 3  someone or something that causes problems.
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What is a 'Liability' Generally, liability refers to the state of being responsible for something, and this term can refer to any money or service owed to another party. Tax liability, for example, can refer to the property taxes that a homeowner owes to the municipal government or the income tax he owes to the federal government.
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liability Full Definition of LIABILITY. 1. a: the quality or state of being liable b: probability. 2. : something for which one is liable; especially: pecuniary obligation: debt —usually used in plural. 3. : one that acts as a disadvantage: drawback.
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What is a 'Liability' What is a 'Liability'. A liability is a company's financial debt or obligations that arise during the course of its business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
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Liability (financial accounting) When cash is deposited in a bank, the bank is said to debit its cash account, on the asset side, and credit its deposits account, on the liabilities side. In this case, the bank is debiting an asset and crediting a liability, which means that both increase.
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liability liability. An obligation that legally binds an individual or company to settle a debt. When one is liable for a debt, they are responsible for paying the debt or settling a wrongful act they may have committed.iability. An obligation that legally binds an individual or company to settle a debt. When one is liable for a debt, they are responsible for paying the debt or settling a wrongful act they may have committed.
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- A liability can mean something that is a hindrance or puts an individual or group at a disadvantage, or something someone is responsible for, or something that increases the chance of something occurring (i.e., it is a cause). Liability may also refer in specific fields to:
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What is a liability? What is a liability? A liability is an obligation and it is reported on a company's balance sheet. A common example of a liability is accounts payable. Accounts payable arise when a company purchases goods or services on credit from a supplier. When the company pays the supplier, the company's accounts payable is reduced.
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Accounting equation Accounting equation. The basic accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a business. It is the foundation for the double-entry bookkeeping system. For each transaction, the total debits equal the total credits.