Borrowed money and unpaid bills due within a year?

• A. Long-Term Liabilities
• B. Current Liabilities or Short-Term Liabilities
• C. Bank Debt
• D. Accounts Payable

Answer: (B)

The main idea is classifying obligations by when they must be paid. If money is borrowed and bills are unpaid with due dates within one year, these are current (short-term) liabilities because they require using current assets to settle soon. Long-term liabilities are those due after more than a year. Bank debt can be either current or long-term depending on the repayment term, so it isn’t fixed to one category. Accounts payable is a common current liability, but the broader label that fits both the borrowed funds due within a year and the unpaid bills due within a year is current liabilities.