What is the difference between debt and liability?
hi to all,
Can any one tell me What is the difference between debt and liability?plz help me on this
Tue Nov 30, 2010 11:40 am
oldguy Senior Member
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Here is an accounting definition of the two types of liabilities -
Current liabilities — these liabilities are reasonably expected to be liquidated within a year. They usually include payables such as wages, accounts, taxes, and accounts payables, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations (e.g. from purchase of equipment), and others.
Long-term liabilities — these liabilities are reasonably expected not to be liquidated within a year. They usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties.
Tue Nov 30, 2010 7:58 pm
coaster Senior Advisor
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Old guy ... mind if I simplify it?
A debt is a liablity if you're the one who borrowed the money.
A debt is an asset if you're the one who lent the money.
Wed Dec 01, 2010 6:50 am
NumbersMadeSimple New Member
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Both of these responses have correct information, but I'm not sure they really answer the specific question.
A liability is any amount owed to another. This includes regular ongoing bills such as the amount due on a utility bill that has been received, but not yet paid.
A debt is a specific type of liability that arises when money has been borrowed. Normally this means a loan, but credit cards would also be included because money is "borrowed" from the credit card company to pay the vendor for your purchase.
Sat Dec 04, 2010 1:21 am
Mr Nice Guy Member
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A liability is anything that takes money from your income.....Example- A car needs new parts and gas which cost money
Debt is a specific amount of money or currency owed.....Example- A car loan, mortgage,
Sat Dec 04, 2010 5:53 am
coaster Senior Advisor
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quote:Originally posted by NumbersMadeSimple Both of these responses have correct information, but I'm not sure they really answer the specific question..
You're right about that; because there were no specifics in the question.
OP: a little more context helps get a more specific answer.
Sat Dec 04, 2010 8:11 am
financialculture Member
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A liability is generally anything that costs you money. A phone bill is a liability. A debt is a kind of liability. You can take out a loan for a car- that is a debt; something owed in the future.
Wed Dec 15, 2010 12:07 pm
Franziska New Member
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They are both money you owe. Debt refers to loans such as bank loan, bonds or some other borrowing instrument. Debt is a type of liability.
Liabilities are amounts owed such as accounts payable, accrued payroll, etc.
