What are Accrued Liabilities ?
Accrued liabilities represents expenses or obligations
incurred in the previous accounting period but the payment
for the same will be made in the next period. In many cases
where payments are made periodically, such as wages, rent
and similar items, the last month’s payment many appear as
accrued liabilities (especially if the practice is to pay
the same on the first working day of a month). This obligation
shown on the balance sheet indicates that the firm owed the
said amount on the balance sheet date.
What are Contingent Liabilities ?
Contingent Liabilities are liabilities which will exist or not, will depend
on any future incident. For the sake of shareholders’, it
is shown in the footnote in the Balance Sheet. The items,
which may come under this sub-heading, are:
- Claims against company, which are still not accepted by
the company.
- Liability for amount uncalled on partly paid shares.
- Arrears of fixed cumulative dividends.
- Estimated amount of incomplete contracts (capital expenditures),
arrangement of which is not made.
- Other contingent liability. For example, liability for
bill discounted, disputed liabilities or claim, etc.
|
Accounts
Home Page
