How To Record Liabilities Journal Entries
Liabilities are the debts due payable by the business to outsiders, i.e., Suppliers, Bank, Financial Institutions, etc. There are two kinds of Liabilities: 1. Current Liabilities :- Examples include Accounts Payable / Creditors , Outstanding Salaries, Unearned Revenue, etc. and 2. Long-term Liabilities / Non Current Liabilities that include Bank Loans, Mortgage Loans, etc. If Your Are Interested In “ How To Enter Accounting Journal Entries For Assets ”, then you can Read it in order to get Information about this topic. The Accounting Journal Entries in respect of Current Liabilities and Non Current Liabilities are the same and the General Rule is that when Liabilities increase, we debit these one and when these decrease, we credit these one. Remember that, the Normal Balance or Favourable Balance of Liabilities is Credit and Unfavourable or Negative Balance is Debit. Now, let us consider an example in order to record Accounting Journal...