Which of the following describes current liabilities?

Current liabilities are indeed defined as financial obligations that a company is expected to settle within one year or within its operating cycle, whichever is longer. These obligations can include short-term loans, accounts payable, accrued expenses, and other debts that are due soon. This classification is critical for assessing a company’s short-term liquidity and financial health, as it indicates the immediacy of obligations that need to be met.

In contrast, the other options describe different concepts related to financial management. Long-term financial commitments pertain to obligations that are due over many years, representing a different category of liabilities known as non-current or long-term liabilities. Assets expected to be sold within the next fiscal year are classified as current assets, not liabilities. Lastly, current assets themselves include cash equivalents and other short-term assets, but they do not describe liabilities. Understanding these distinctions helps to properly categorize a company's financial obligations and resources, which is essential for effective management and decision-making.