 Current liabilities are debt with two key features. The first is that a company expects to pay the debt from either existing assets or through the creation of other current liabilities. The second is that the company will pay the debt within one year or one operating cycle, whichever is longer. Current liabilities are either known amounts or estimated amounts. Here is a list of common current liabilities whose amounts would be known. Let's look at these in more detail. The accounts payable account is used for amounts owed to vendors for products or services purchased on account. Most states have a sales tax to help generate state revenue. Sales tax is neither an expense nor a revenue for retailers. Retailers are in fact just the collection arm of the state government. Retailers collect sales tax from customers and remit it to the state. Here's an example of that. Assume the Smith's grocery store records $100 of sales in a state with 6% sales tax. The journal entry is a debit to cash for $106, which is the amount of revenue plus the sales tax. Sales revenue is credited for $100 and sales tax payable is credited for $6. When the Smith's grocery store remits the sales tax to the state, they make the following journal entry. Sales tax payable is debited for $6 and cash is credited for $6. Short-term notes payable are due within one year. They might require an adjusting entry to accrue interest expense. There's a separate video example on the accounting for notes payable that I would encourage you to review. Payroll liabilities include both salaries and wages for employees, payroll taxes for employers, and often employee benefits. There's a separate video example on the accounting for payroll liabilities that I would also encourage you to review. Unearned revenues occur when cash is collected before goods or services are provided, which is when the revenue becomes earned. This example is on my mind today because I just paid this. Boise State sells me season tickets to eight games for $800. It's really six games, but I wanted to keep the math simple for me. I'm not that good at math. Anyway, the university makes the following entry for the sale of season tickets. Cash is debited for $800 and unearned ticket revenue is credited for $800. After each home game, Boise State would make the following entry, and this is an adjusting entry. They would debit unearned ticket revenue and credit ticket revenue for $100.