Similarities & Differences Between Liability and Expense
1. A Liability is the amount due or expense payable by the business to outsiders (Suppliers, Banks, Financial Institutions, etc). Examples of liabilities are Sundry Creditors / Accounts Payable , Outstanding Expenses such as Salaries Payable , Fees Payable, Rent Payable, Utilities Bills Payable, and Unearned Revenues such as Rent Received in Advance , Fees Received in Advance, Bank Loans, etc. while Expenses are the costs of earning Revenue for the business during the accounting. Examples are Rent, Expense, Salaries Expense, etc. 2. A liability has mainly two types Current Liability and No n Current Liability . A Current Liability is payable by the business to outsiders within one year while a No n Current Liability is payable more than one year. Examples of Current Liabilities are Accounts Payable, Outstanding Expenses, Unearned Revenues, Current Portion of a Loan, etc., while examples of No n Current Liabilities / Long-Term Liabilities are Bank Loans...