Which of the following is a current liability in personal finance?

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Multiple Choice

Which of the following is a current liability in personal finance?

Explanation:
Current liabilities are obligations that must be settled within one year. A bank overdraft fits this category because it’s debt owed to the bank that is typically repaid quickly, often within days or weeks. Mortgages and long-term loans have repayment periods spanning many years, so they are considered non-current liabilities. Capital equipment is an asset, not a liability. So the bank overdraft is the current liability.

Current liabilities are obligations that must be settled within one year. A bank overdraft fits this category because it’s debt owed to the bank that is typically repaid quickly, often within days or weeks. Mortgages and long-term loans have repayment periods spanning many years, so they are considered non-current liabilities. Capital equipment is an asset, not a liability. So the bank overdraft is the current liability.

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