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Current liabilities are debts due within a year or the operating cycle of a company. The rent a business pays every month is an example of a current liability. Understanding current liabilities is essential for assessing a company's financial health.
Current liabilities are debts or obligations that are due within one year or the operating cycle of a company, whichever is longer. Among the options provided, The rent a business pays every month is an example of a current liability as it represents an expense that the business is obligated to pay in the near future.
Other examples of current liabilities include accounts payable, accrued expenses, and short-term loans. These are crucial in understanding a company's financial health and its ability to meet its short-term obligations.
On the balance sheet, current liabilities are typically listed before long-term liabilities and are important for analyzing a company's liquidity and financial stability.
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