Internal Liabilities

Debts which are payable to owners of business are called Internal liabilities. For example: Capital of business is called internal liabilities.

 The total amount of debts payable by a business to its owners are called internal liabilities e.g., capital.


Example-For a company Internal liability mean that company can pay salary, thus salary is internal liability, and the company can pay interest to bank it's external liability.

Internal debt owed by a government (money a government borrows from its citizens) is part of the country's debt. it's a form of fiat creation of cash, in which rarely obtains cash not by printing it, but by borrowing it. the money created is in the form of treasury securities or securities borrowed from the central bank.

These may be traded but way only rarely be spent on goods and services. in this way, the expected increase in inflation thanks to the increase in national wealth is not up to if the govt had merely written the money and increased the a lot of liquid forms of wealth (i.e., the money supply).