What are obligations owed to outside parties called?

Obligations owed to outside parties are referred to as liabilities. Liabilities represent financial responsibilities that a company has to settle, such as loans, accounts payable, and other obligations that will require the transfer of economic benefits in the future. Understanding liabilities is essential in assessing a company's financial health, as they reflect the extent of what a business owes to creditors and other outside stakeholders.

Assets, on the other hand, refer to resources owned by a company that can provide future economic benefits. Equity represents the ownership interest in the company after deducting liabilities, while debt instruments are specific types of financial liabilities, such as bonds or loans, but not the general term for obligations owed to outsiders. Thus, liabilities encompass the broader concept of all obligations to external parties.