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Which of the following is a characteristic of a current liability?

- A current liability is a liability that is due within 30 days.
- A current liability is a liability that is due within one year or one operating cycle, whichever is longer.
- A current liability is a liability that is due within 10 days.
- A current liability is a liability that is due in longer than a one-year period, or one operating cycle.

User Damsorian
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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.

User Noah Koch
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