Define short-term liability.

Short-term liabilities are defined as obligations that a business is required to settle within one year. This classification is important in financial management, as it helps assess a company's liquidity and short-term financial health. These liabilities typically include accounts payable, short-term loans, and other debts that must be paid off within the operating cycle of the business or within a year, which impacts the firm's cash flow and operational decisions.

Illustrating this further, if a company borrows money or owes payments that are due within a short timeframe, it must manage its cash flow effectively to meet these obligations promptly. Understanding short-term liabilities is crucial for stakeholders, such as investors or creditors, as it indicates how well a business can handle its immediate financial responsibilities.

The other options describe different categories of obligations that either extend beyond the one-year timeframe or involve contingent liabilities, which do not fit the standard definition of short-term liabilities.