First Considerations in Starting a Family Child Care Busine…

Liabilities There are two types of liabilities, current liabilities and long-term liabilities. Current liabilities are liabilities that will be paid out over the short term (less than one year). This includes any principal and interest payments on loans made during the current year. On a balance sheet that is called the “Current Portion of Long Term Debt”. You calculate this number by simply adding up all the loan payments you expect to make during the current period of your balance sheet. Long-term liabilities are liabilities such as loans (“Bank Loans Payable”) that will be paid off over multiple years such as a mortgage or vehicle loan. To calculate the long-term portion of your loans simply take the total balance of your loans and subtract the current portion. The result is your long-term portion of Bank Loans Payable.

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