Long-term Liabilities

The second classification of business liability is called Long-Term Liability. A long-term liability is money owed by a business that must be paid beyond a company's operating cycle.  In other words, it is debt that is due beyond a one year period. Examples of long term liabilities include:

-    a 3 year business bank loan,
-    a 5 year business car loan,
-    a mortgage on a building owned by the business,
-    bond payable,
-    long term note payable,
-    deffered income tax payable,
-    long term lease payable,
-    loan on office equipment,
-    long term loan office furniture,
-    a 3 year loan from a family member who invests into your company,
-    etc...

Since in our example, Murray does not expect to have any long-term debt in 200X and 200Y, his Long-Term Liabilities account balance, for each forecasted year, will be ZERO.