Spontaneous Liabilities

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Spontaneous Liabilities

Obligations that arise automatically in the course of operating a business when a firm buys goods and services on credit.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Spontaneous Liabilities

Liabilities that a person or firm acquires when buying goods or services on credit. Specifically, spontaneous liabilities are the obligations to pay for the goods or services at some point in the future.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Accounts payable (A/P) is normally a spontaneous liability. For example, increasing sales will spontaneously increase accounts payable since the company purchases more raw materials to support greater production in response to increased sales.

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