What is the difference between Liability and Expense?

Liability is an obligation or a debt that a business takes for the smooth running of its operations. It is an essential part of the business which finances significant investments to keep operations running. An expense is money spent to earn revenue from the sale of its goods or services. A business incurs an expense in the current period, and its payment is made when it's acquired.

Expenses are documented in the income statement of the company. One of the primary differences between liability and expense is timing. One of the attributes of a liability is that it is either payable within one accounting year or more than one accounting period. The benefits of liabilities are available during the current period, but it is due to be paid at a fixed rate in the future.