Current liabilities are defined as all debt and obligations payable within 12 months.

• A. All debt and obligations payable within 12 months
• B. Assets not due within 12 months
• C. Fixed assets
• D. Long-Term liabilities

Answer: (A)

Current liabilities are obligations the company expects to settle within one year (12 months) or within the operating cycle, whichever is longer, with 12 months being the standard horizon in many financial statements. This means debts and other obligations due in the near term are classified as current liabilities. Examples include accounts payable, short-term borrowings, accrued expenses, and the current portion of long-term debt. Since the question describes current liabilities as all debt and obligations payable within 12 months, it matches this definition precisely, making it the best choice. Items not due within 12 months aren’t current liabilities; they’re long-term or noncurrent liabilities. Assets maturing within 12 months aren’t liabilities at all, and fixed assets are long-term assets.