Usually appearing on an organization's balance sheet, liabilities are something which a firm owes to a person or another firm. they may be in the form of creditors - people or firms who have sold you goods which you have not yet paid for, or they may be money borrowed from a financial institution - loans or overdrafts.

Current Liabilities -  they  represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. Examples: accounts payable, wages payable, rent payable.

Long Term Liabilities - they represent  liabilities that are expected to be paid after a year from the balance sheet date. Examples: long term loans payable, long term leases.