Which of the following statements BEST describes the difference between current and long-term liabilities? A. Current liabilities are debts that must be paid within a year,long-term liabilities do not. B. Current liabilities are those which will cost less in debt interest than long-term liabilities. C. Current liabilities are debts that need to be paid within a pay cycle, whereas long-term liabilities do not. D. Current liabilities are debts on current assets whereas long-term liabilities are debts on fixed and intangible assets. E. Current liabilities are debts on tangible assets whereas long-term liabilities are debts on intangible assets.

## Step 1<br />The problem is asking us to identify the correct statement that best describes the difference between current and long-term liabilities. <br /><br />## Step 2<br />Current liabilities are obligations that a company needs to settle within one year or within its operating cycle, whichever is longer. These include accounts payable, short-term loans, and other similar obligations.<br /><br />## Step 3<br />Long-term liabilities, on the other hand, are obligations that extend beyond one year or the operating cycle. These include bonds payable, long-term loans, and other similar obligations.<br /><br />## Step 4<br />By comparing the definitions of current and long-term liabilities, we can see that option A correctly describes the difference between the two. It states that current liabilities are debts that must be paid within a year, while long-term liabilities do not.