A liability account is a general ledger account in which a company records its debt, obligations, customer deposits and customer prepayments, certain deferred income taxes, etc. that are the result of a past transaction. Common liability accounts under the accrual method of accounting include Accounts Payable, Accrued Liabilities (amounts owed but not yet recorded in Accounts Payable), Notes Payable, Unearned Revenues, Deferred Income Taxes (certain temporary timing differences), etc.
The balances in liability accounts are nearly always credit balances and will be reported on the balance sheet as either current liabilities or noncurrent (or long-term) liabilities.
The company with the liability account for the debt or payables is known as the debtor. The lenders, vendors, suppliers, employees, tax agencies, etc. who are owed the money are known as the company's creditors.
