A liability is a debt or other obligation owed by one party to another party?

A liability is a debt or other obligation owed by one party to another party Companies take on liabilities to increase their capital in order to finance operations or projects. Liabilities can be either short-term or long-term. Short-term liabilities cover any debt that must be paid within the coming year. This includes interest payments on loans (but not necessarily the principal of the loan), monthly utilities, short-term accounts payable, and so on. Long-term liabilities cover any debts with a lifespan longer than one year. Examples would be mortgages, rent on property, pension obligations, auto loans, and any other large expense that is paid over the course of multiple years. Because liabilities are outstanding balances, they are considered to work against the overall spending power of a company