What type of liability includes debts that are due to be paid within a year?

Current liabilities are obligations that a business is expected to settle within one year or one operating cycle, whichever is longer. They typically include accounts payable, short-term loans, accrued expenses, and other debts that will require outflow of resources in the near future. Recognizing current liabilities is essential for assessing a company's short-term financial health, as they reflect the immediate financial obligations that need to be managed and cleared. This classification is crucial for stakeholders, including creditors and investors, who seek to understand the liquidity and operational efficiency of the business. Other types of liabilities, such as long-term or contingent liabilities, involve obligations that extend beyond one year or are dependent on uncertain future events, making them different from current liabilities in terms of their due date and impact on immediate cash flow.