Final answer:
A current liability is a liability due within one year or one operating cycle, whichever is longer, as listed on a company's balance sheet.
Step-by-step explanation:
The characteristic of a current liability is that it is a liability that is due within one year or one operating cycle, whichever is longer. Current liabilities are essential information found on a company's balance sheet, which is an accounting tool that lists assets and liabilities.
Understanding current liabilities helps in managing the asset-liability time mismatch, which occurs when, for example, customers can withdraw a bank's liabilities in the short term while the bank's assets are repaid in the long term.
An effective management of current liabilities contributes to the stability of a bank's bank capital, which represents the bank's net worth and its ability to absorb potential losses.