Okuzeka
Accounting & Tax vocabulary · Assets, Liabilities & Equity

Current liability

Meaning in accounting & tax, with examples

nounCore term

In accounting & tax, current liability means: A debt or obligation that a company must pay within one year, such as supplier invoices, short-term loans, taxes payable and unpaid salaries.

In Turkish: kısa vadeli yükümlülük, kısa vadeli yabancı kaynak, kısa vadeli borç

How it is used

Shown on the balance sheet against current assets. The part of a long-term loan that falls due within the next year is also reclassified as a current liability.

Example sentences

  1. Current liabilities rose because the VAT for December has not been paid yet.

  2. The part of the bank loan due next year is shown under current liabilities.

Common collocations

  • total current liabilities
  • current portion of long-term debt
  • other current liabilities
  • liabilityAn amount a business owes to others, such as suppliers, banks, employees or the tax office, which it will have to settle in the future.
  • current assetAn asset that is expected to be turned into cash, sold or used up within one year, such as cash, receivables, inventory and prepaid expenses.
  • accounts payableMoney a company owes to its suppliers for goods or services bought on credit, and also the team that processes and pays those supplier invoices.
  • accrued expenseA cost that belongs to a period but has not yet been invoiced or paid, recorded as an expense and a liability so the period shows its true cost.
  • balance sheetA financial statement that shows what a company owns (assets), what it owes (liabilities) and the owners' share (equity) on a specific date.

More terms: Assets, Liabilities & Equity

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level:

This page explains English vocabulary for learners. It is not financial advice.