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L

Liability

Something you’re on the hook for. You might think of liabilities as obligations that will need to be settled at some point. Spent a hundred bucks on your credit card? Well, you know you’ve got to pay it someday. That’s now a $100 liability. Take out a mortgage? That’s a liability, too. (But the house you bought with it is an asset, even if it might not feel that way.) Take out a business loan? That’s a liability, too. (Office space and equipment you bought with it are “assets,” even if they might not feel that way.) (See also: Asset, Balance Sheet)

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