Current liabilities are accounts where a business owes money that is due in the next year. Companies list each current liability account on the balance sheet and then sum each account to display total current liabilities. To find total current liabilities, an accountant must go through the general ledger and find all accounts associated as current liabilities and then sum the accounts together. Current liabilities are important to see how much a company owes in the short term.
Look through the general ledger and mark all the current liabilities. Current liabilities will be accounts where the company must pay an amount to another company or someone else during the next year. For example, an accountant would mark items such as accounts payable, interest payable and loans payable this year.
List separately the accounts and their associated amounts that you marked in Step 1. In our example, accounts payable has a balance of £65,000, interest payable has a balance of £13,000 and loans payable this year has a balance of £19,500.
Add all the current liabilities to determine total current liabilities. In our example, £65,000 plus £13,000 plus £19,500 equals £97,500 of current liabilities.