A liability is a financial obligation or debt owed by an individual, company, or organization to another party, arising from past transactions, events, or contractual agreements. Liabilities represent claims against assets and require future settlement or payment, either in cash, goods, or services. Common types of liabilities include accounts payable, loans, bonds, mortgages, accrued expenses, and deferred revenues. Liabilities are classified as current or non-current based on their maturity dates or settlement timelines. Current liabilities are due within one year and include short-term obligations such as accounts payable, accrued expenses, and short-term loans. Non-current liabilities, also known as long-term liabilities, mature beyond one year and encompass long-term debt, deferred tax liabilities, and pension obligations. Liabilities are recorded on the balance sheet alongside assets and equity, reflecting the financial position and leverage of an entity. Managing liabilities effectively is essential for financial health, liquidity management, creditworthiness, and long-term sustainability, requiring prudent debt management, risk mitigation strategies, and adequate cash flow planning to meet obligations and maintain solvency.