Which of the following best defines current liabilities?

Current liabilities refer to obligations or debts that a company is expected to settle within one year or one operating cycle, whichever is longer. This definition is foundational to understanding a company's short-term financial health and liquidity. Current liabilities may include items such as accounts payable, short-term loans, accrued expenses, and other similar obligations.

The focus on the one-year timeframe is important because it distinguishes current liabilities from long-term liabilities, which are obligations due beyond that timeframe. Knowing the definition of current liabilities helps stakeholders assess a company's ability to meet its short-term financial commitments using its current assets.