What does Liabilities mean in Finance?

In simple words we can define liability as legal debts or obligation of a company that arise during the span of business operations. It is accountability which a business undertaking has to complete.
It is actually recorded in the right hand side of balance sheet. It includes loans, accounts payable, deferred payment, and accrued expenses. It is very crucial because they are used to finance operations and for large expansions. Just for example, the outstanding money that a company owes to its creditor or suppliers would be considered as liability (Outstanding Liability).