What Is Owed: Liabilities: The liabilities section of the balance sheet summarizes debts owed, including both personal and business-related debts. The debt could be either a short-term (or current) liability, an obligation to be paid off within one year, or a long term liability, debts that do not have to be paid in full until more than a year from now.
To be accurate, record debt obligations at their current payoff amounts (excluding future interest payments). Following are some examples of items to include in the liabilities section of a balance sheet, with some suggested subheadings.
Short-Term (or Current) Liabilities:
- Personal loans owed to other people.
- Credit card and charge account balances.
- Other open-end credit obligations.
- Professional services unpaid (doctors, dentists, chiropractors, lawyers)
- Taxes unpaid.
- Past-due rent, utility bills, and insurance premiums.
- Automobile loans.
- Real estate mortgages.
- Home equity (second mortgage) loan.
- Consumer installment loans and leases (although a lease is technically not a debt)
- Education loans.
- Margin loans on securities.