Bills Payable on Liability Side of Balance Sheet

Bills Payable is a type of short-term liability that a company owes to its creditors or suppliers. It is a written promise to pay a specific amount of money on a specific date in the future. Bills Payable is shown on the liability side of the balance sheet because it represents the amount of money that the company owes to its creditors or suppliers.

Under which head Bills Payable is shown on the liability side of the balance sheet?

Bills Payable is shown on the liability side of the balance sheet under the head of Current Liabilities. Current Liabilities are those liabilities that are expected to be settled within one year or less. Bills Payable is a short-term liability that is expected to be paid within a year, so it is included in the Current Liabilities section of the balance sheet.

Why Bills Payable is shown under Current Liabilities?

Bills Payable is shown under Current Liabilities because it represents the amount of money that the company owes to its creditors or suppliers that is expected to be paid within a year. Current Liabilities are shown on the liability side of the balance sheet because they represent the obligations of the company that are expected to be settled within a year or less.

Conclusion

In conclusion, Bills Payable is a short-term liability that a company owes to its creditors or suppliers. It is shown on the liability side of the balance sheet under the head of Current Liabilities because it represents the amount of money that the company owes that is expected to be paid within a year.

Bills payable is shown under heading current liabilities since it is a short term financial obligations which needs to paid within one fiscal year