Author Topic: Are liabilities always a bad thing?  (Read 587 times)

Offline Repon

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Are liabilities always a bad thing?
« on: July 08, 2015, 01:52:52 PM »
Are liabilities always a bad thing?

Liabilities are obligations and are usually defined as a claim on assets. However, liabilities and stockholders' equity are also the sources of assets. Generally, liabilities are considered to have a lower cost than stockholders' equity. On the other hand, too many liabilities result in additional risk.

Some liabilities have low interest rates and some have no interest associated with them. For example, some of a company's accounts payable may allow payment in 30 days. With those payables it is better to have the liability and to keep your cash in the bank until they become due.

In our personal lives, our first house was probably purchased with a down payment and mortgage loan. That mortgage loan was a big liability, but it allowed us to upgrade our living space. I viewed my mortgage loan liability as a good thing because it allowed me to own a nice home in a beautiful neighborhood.

So some liabilities are good—especially the ones that have a very low interest rate. Too many liabilities could cause financial hardships.
Senior Lecturer in Accounting
Department of Business Administration
Faculty of Business & Economics
Daffodil International University

Offline gour2010

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Re: Are liabilities always a bad thing?
« Reply #1 on: May 10, 2016, 10:31:40 AM »
it depends on the actual scenario

Offline Repon

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Re: Are liabilities always a bad thing?
« Reply #2 on: May 30, 2016, 05:29:53 PM »
Yes, indeed!!!
Senior Lecturer in Accounting
Department of Business Administration
Faculty of Business & Economics
Daffodil International University

Offline rayhanul.bba

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Re: Are liabilities always a bad thing?
« Reply #3 on: May 31, 2016, 10:38:38 PM »
No
Md. Rayhanul Islam
Senior Lecturer
Department of Real Estate
Facuty of Business & Entrepreneurship
Daffodil International University

Offline Madhusudan Das

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Re: Are liabilities always a bad thing?
« Reply #4 on: June 05, 2016, 04:35:39 PM »
It depends on the situation sir.
MadhuSudan Das
Lecturer, BTHM, DIU.

Offline Repon

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Re: Are liabilities always a bad thing?
« Reply #5 on: July 10, 2016, 05:17:48 PM »
It depends on the situation sir.
Exactly....you're 100% right
Senior Lecturer in Accounting
Department of Business Administration
Faculty of Business & Economics
Daffodil International University

Offline ummekulsum

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Re: Are liabilities always a bad thing?
« Reply #6 on: July 18, 2016, 02:23:38 PM »
its not healthy for organization but but you can show it some tax purposes...