Question

Bobby is completing a residential loan application. on the application, he lists his liabilities. what are liabilities?

Answer 1

In financial accounting, a liability is defined because the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which can result in the transfer or use of assets, provision of services or other yielding of economic benefits within the future.

What are liabilities?

• Any sort of borrowing from persons or banks for improving a business or personal income that is payable during short or long time.
• A duty or responsibility that obligates the entity to a different , leaving it little to avoid settlement and a transaction that has already occurred.
• Liabilities in financial accounting needn't be legally enforceable; but can be based on equitable obligations or constructive obligations.
• An equitable obligation may be a duty based on ethical or moral considerations.
• A constructive obligation is an obligation that's implied by a set of circumstances in a particular situation, as against a contractually based obligation.

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