Which term describes debts due within one year?

• A. Maker
• B. Corporation
• C. Current Liabilities
• D. Proprietorship

Answer: (C)

Debts due within one year are classified as current liabilities on the balance sheet. This category captures obligations that are expected to be settled in the short term, such as accounts payable, short-term notes payable, and accrued expenses. Identifying these as current liabilities helps assess a company’s liquidity and working capital, since they require cash in the near term. The other terms don’t describe a time frame for debt: a maker is the party who signs a promissory note, a corporation is a form of business organization, and a proprietorship refers to a type of ownership. When a debt is due after more than one year, it’s considered a long-term liability.