Choose your...

Country Language
70% off
for 3 months
Buy now
FINAL DAYS!
70% off
for 3 months
Buy now
Get your
business
organised
Buy now
70% off
for 3 months
Buy now
SALE Save 70% for 3 months Buy now
Get your
business
organised
Buy now
DON'T MISS OUT
Buy now and get 70% off for 3 months Claim offer
DON'T MISS OUT
Claim offer
SALE
Buy now and
save 50% off today
See plans + pricing
50 %off for 3 months
50 %off for 12 months
  • Invoices
  • Expenses
  • Reports

What is a Liability Account?

Liability Account (Definition)

A liability account is used to keep track of all legally-binding debts that must be paid to someone else. They are part of a company's general ledger and balance sheet. A liability account records amounts owed to suppliers for goods and services that were given to you on credit. It also includes the amount owed to banks and other lenders; and amounts owed for wages, interest, taxes. A liability account also includes amounts that customers have paid, including deposits and any taxes a business owes. Some of the most common liabilities accounts include:

  • Loans payable
  • Accounts payable
  • Accrued expenses
  • Customer deposits
  • Deferred taxes

Related articles

Accounting

Chart of accounts: Definition, how to set up, and examples

Accounting and bookkeeping

Accounts Payable: Definition, Example, and Journal Entry

Financial reports

General Ledger: Meaning, Classification, and Examples

Ready to run your business better with QuickBooks Online?