Which of the following is an example of a current liability?

A current liability is an obligation that a company expects to settle within one year or within its operating cycle, whichever is longer. Accounts Payable is a clear example of a current liability because it represents amounts a company owes to suppliers for purchases made on credit that are typically due within a short period, such as 30 days. This aligns with the definition of a current liability, as the business is expected to pay this obligation in the near future, thus affecting its short-term financial position.

On the other hand, long-term liabilities are those that are not expected to be paid off within the current operating cycle, such as a Long Term Note Payable. Deferred Income Tax refers to taxes that are payable in future periods and isn’t classified as a current liability unless it is due within the year. Property, Plant, and Equipment are long-term assets and reflect investment in resources that will aid operational activities over a longer duration, rather than representing current obligations. Therefore, Accounts Payable clearly fits the criteria of a current liability, making it the correct choice.