Question

What are internal liabilities?

Answer 1

The total amount of debts payable by a business to its owners are called internal liabilities e.g., capital. All obligations which a business has to pay back to external parties i.e. lenders, vendors, etc is external liabilities.

• Current liabilities are a company’s short-term financial obligations that are due within one year or within a normal operating cycle.
• Debt majorly refers to the money you borrowed, but liabilities are your financial responsibilities.
• Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.