Distinguish between short-term and long-term liabilities. Provide an example of each.

Question

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The Answer is Short-term liabilities are resources we owe some outside organization or entity that we will pay within one year; long-term will be paid in more than one year. A short-term liability could be accounts payable, note payable, wages payable, taxes payable, for example. Examples of long-term liabilities include bonds payable and mortgages payable.

Distinguish Between Short-Term and Long-Term Liabilities