Fill in the Blanks
Complete the text
Liabilities
are
financial
or
debts
that
a
business
owes
to
others
.
These
can
be
bills
,
loans
,
or
any
other
that
must
be
paid
in
the
future
.
Liabilities
are
a
part
of
running
a
business
and
are
listed
on
the
balance
sheet
.
They
show
what
the
company
is
responsible
for
.
For
example
,
if
a
bakery
buys
flour
and
sugar
from
a
and
agrees
to
pay
later
.
That
unpaid
amount
becomes
a
liability
.
Or
,
if
the
bakery
takes
a
to
buy
a
new
oven
,
the
loan
is
a
liability
until
it
?
s
fully
paid
.
1
)
Helps
you
understand
how
much
your
business
owes
2
)
Shows
the
balance
between
assets
and
debts
3
)
Makes
it
easier
to
track
business
growth
4
)
Keeps
your
finances
clear
and
organised
1
)
Helps
plan
when
to
pay
bills
and
loans
2
)
Avoids
running
out
of
money
unexpectedly
3
)
Supports
better
budgeting
and
spending
4
)
Makes
daily
operations
smoother
1
)
Some
Liabilities
may
be
tax
-
deductible
2
)
Helps
prepare
accurate
tax
returns
3
)
Reduces
the
risk
of
tax
penalties
4
)
Keeps
records
ready
for
audits
1
)
Shows
how
much
risk
your
business
carries
2
)
Helps
avoid
taking
on
too
much
debt
3
)
Makes
it
easier
to
plan
for
tough
times
4
)
Encourages
smarter
financial
decision
s
1
)
Current
Liabilities
They
are
obligations
a
business
must
settle
within
one
year
or
within
its
normal
operating
cycle
.
They
usually
arise
from
everyday
business
activities
and
directly
affect
short
-
term
cash
flow
.
Effective
management
of
them
helps
maintain
smooth
daily
operations
and
a
healthy
cash
position
.
Its
examples
include
:
1
)
:
Money
a
business
owes
to
suppliers
for
goods
or
services
purchased
on
credit
that
must
be
paid
soon
.
2
)
:
Salaries
earned
by
employees
but
not
yet
paid
at
the
end
of
the
accounting
period
.
3
)
:
Taxes
the
business
owes
to
the
government
,
such
as
sales
tax
or
income
tax
,
which
are
due
shortly
.
4
)
:
Borrowed
funds
that
must
be
repaid
within
one
year
,
often
used
for
working
capital
needs
.
5
)
:
Expenses
already
incurred
,
like
rent
or
utilities
,
but
not
yet
paid
.
2
)
Non
-
current
Liabilities
Also
known
as
long
-
term
liabilities
,
are
debts
that
are
not
due
within
the
next
twelve
months
.
These
obligations
are
typically
linked
to
long
-
term
financing
and
expansion
activities
.
They
allow
businesses
to
invest
in
growth
without
immediate
repayment
pressure
.
However
,
they
often
involve
interest
payments
that
increase
the
total
cost
over
time
.
Common
examples
are
:
1
)
)
:
Borrowed
money
from
a
bank
that
is
repayable
over
several
years
through
instalments
.
2
)
:
Funds
raised
by
issuing
bonds
to
investors
,
which
the
company
must
repay
at
a
future
maturity
date
with
interest
.
3
)
:
Unsecured
long
-
term
borrowing
where
repayment
is
promised
based
on
the
company
?
s
creditworthiness
.
4
)
:
Long
-
term
payments
a
company
must
make
for
using
property
or
equipment
under
a
lease
agreement
.
5
)
:
Taxes
owed
in
the
future
due
to
timing
differences
between
accounting
income
and
taxable
income
.
3
)
Contingent
Liabilities
They
are
possible
debts
that
may
arise
based
on
the
outcome
of
a
future
event
.
They
are
not
certain
,
but
are
disclosed
in
financial
statements
because
they
could
affect
the
company
?
s
finances
later
.
These
are
recorded
only
when
the
obligation
becomes
probable
and
can
be
reasonably
estimated
.
Its
examples
are
listed
below
:
1
)
:
A
possible
payment
the
company
may
have
to
make
if
it
loses
a
legal
case
.
2
)
:
Future
repair
or
replacement
costs
the
business
may
incur
if
sold
products
fail
within
the
warranty
period
.
3
)
:
An
obligation
that
arises
if
the
business
promises
to
repay
another
party
?
s
debt
in
case
of
default
.
4
)
:
Potential
fines
or
cleanup
costs
that
may
occur
if
regulations
are
violated
.
5
)
:
Possible
payments
the
company
might
need
to
make
if
a
claim
against
it
is
approved
.
Assets
are
resources
by
a
business
that
provide
future
economic
.
They
can
be
used
to
produce
goods
,
deliver
services
,
or
generate
income
.
Liabilities
,
on
the
other
hand
,
are
the
business
must
settle
in
the
future
using
cash
,
goods
,
or
services
.
In
simple
terms
,
assets
bring
into
the
business
,
while
liabilities
represent
claims
that
value
.
Assets
generally
the
financial
position
of
a
company
because
they
increase
its
value
and
earning
capacity
.
Liabilities
the
company
?
s
net
worth
since
they
represent
amounts
that
must
be
paid
out
.
The
difference
between
total
assets
and
total
Liabilities
is
known
as
owner
?
s
,
which
shows
the
true
financial
standing
of
the
business
.
However
,
having
more
assets
than
Liabilities
is
a
sign
of
financial
health
.
Common
examples
of
assets
include
cash
,
inventory
,
,
equipment
,
buildings
,
and
accounts
receivable
.
Examples
of
Liabilities
include
bank
loans
,
accounts
payable
,
,
and
taxes
payable
.
Comparing
these
items
helps
stakeholders
understand
how
a
company
finances
its
operations
and
manages
its
.
Liabilities
represent
amounts
the
business
that
be
paid
in
the
future
.
Expenses
,
on
the
other
hand
,
represent
the
of
using
to
the
business
,
such
as
rent
,
salaries
,
and
utilities
,
and
are
recognised
when
they
are
incurred
.
Therefore
,
liabilities
show
obligations
,
while
expenses
show
the
cost
of
operations
.
General
examples
of
include
accounts
payable
,
loans
payable
,
and
taxes
payable
.
Examples
of
include
rent
,
salary
,
electricity
,
and
advertising
expenses
.
1
)
:
Money
borrowed
from
a
bank
that
must
be
repaid
with
interest
.
2
)
:
Bills
or
invoices
owed
to
suppliers
for
goods
or
services
.
3
)
:
Outstanding
balances
owed
on
business
or
personal
credit
cards
.
4
)
:
Salaries
that
are
owed
to
employees
but
not
yet
paid
.
5
)
:
Tax
amounts
due
to
the
government
that
haven
?
t
been
paid
yet
.
6
)
:
Long
-
term
loans
taken
out
to
buy
property
or
buildings
.
7
)
:
Money
received
in
advance
for
goods
or
services
yet
to
be
delivered
.
8
)
:
A
common
household
liability
where
payments
are
due
for
services
like
water
,
electricity
,
or
gas
.
|
Creed Paragraph #2
Complete the lyrics of the song with the words that appear on the right side