Which of the following best describes current liabilities?

• A. Paying creditors
• B. Long-term loans
• C. Mortgages
• D. Profits

Answer: (A)

Current liabilities are obligations a business expects to settle within one year (or the operating cycle, if shorter). They arise from day-to-day operations, like amounts owed to suppliers (accounts payable), short‑term borrowings, wages, taxes, and other accrued expenses. Paying creditors is directly tied to settling these near-term obligations, which is why it best fits the idea of current liabilities.

Long-term loans and mortgages, by contrast, are typically due after more than one year, so they’re classified as long-term liabilities. Profits are not liabilities at all; they represent earnings and belong in revenue/retained earnings discussions, not as obligations the company must pay.