What type of liability is classified as 'fixed liability'?

The classification of 'fixed liability' primarily pertains to obligations that are long-term in nature and are typically not expected to be settled within one year. A mortgage payable is a prime example of a fixed liability, as it represents a long-term debt secured by real property, usually with a repayment period extending over several years, often 15 to 30 years.

This distinguishes it from other types of liabilities. Accounts payable and accrued expenses are considered current liabilities because they are usually due within a short time frame, typically within one year. Short-term loans also fall into the current liability category, as they are expected to be repaid within a year or less. In contrast, the long-term commitment of a mortgage payable does not require short-term settlement, placing it firmly within the 'fixed liability' classification. Understanding the nature of these liabilities is crucial for assessing the financial health and cash flow management of a business, including funeral service establishments.