What term refers to all debt and obligations owned by a business?

Liabilities represent all debts and obligations that a business is responsible for. This includes loans, accounts payable, mortgages, and any other financial commitments that the business must fulfill. Understanding liabilities is crucial as they directly affect the financial health of a company; they indicate how much the company owes to others.

In financial statements, liabilities are typically classified as either current or long-term. Current liabilities are due within one year, while long-term liabilities extend beyond one year. This classification helps stakeholders assess the company’s financial stability and liquidity.

Assets, on the other hand, include everything that the business owns and can use to generate revenue, while equity represents the ownership interest in the company after liabilities have been deducted from assets. Investments refer to the assets or stakes acquired in another entity, rather than debts or obligations. Thus, the term that accurately encapsulates all debts and obligations is liabilities.