Other forms of current liabilities

Cash payments and deferred revenue

Cash payments

Payments for goods and services

Cash can include:

• Traditional notes and coins

• Other currencies

• Any transaction method that immediately affects the bank account, such as a check that is written and then deposited by the recipient

When cash payments affect liabilities

Cash payments affect liabilities only when they are made to settle outstanding obligations or debts owed by a business to its creditors or suppliers.

Purchases made with cash are generally NOT considered liabilities.

Deferred revenue, or unearned revenue, is paid to the business for work not yet performed, recorded in books as liability