What term is used to describe the financial obligations due to creditors?

The term that describes financial obligations due to creditors is liabilities. In accounting, liabilities represent an entity's obligations or debts that arise during the course of business operations. This can include loans, accounts payable, mortgages, and other financial commitments that the company or individual is required to settle in the future.

Understanding liabilities is crucial for assessing the financial health of an entity, as they indicate the amount that must be paid back to creditors. This contrasts with assets, which are resources owned by the entity that have economic value. Investments typically refer to the purchase of assets or properties with the expectation of generating income or profit, while equity represents the ownership interest in the assets after deducting liabilities. Recognizing these distinctions is vital for both financial reporting and ensuring informed financial decision-making within the context of funeral service or any other business sector.