What are debts that are incurred in the normal course of business and must be repaid within one year called?

Debts that are incurred in the normal course of business and are expected to be repaid within one year are classified as current liabilities. This classification is important because it reflects a company's short-term financial obligations that are due in the near term, typically within a single operating cycle or one year. Current liabilities are crucial for assessing a business's liquidity—its ability to meet its short-term obligations with its available assets.

In business accounting, current liabilities commonly include accounts payable, short-term loans, wages payable, and taxes owed. This helps stakeholders understand the financial health of the business and its capacity to manage immediate expenses. The understanding of current liabilities plays a significant role in financial reporting and analysis, making it a fundamental concept in accounting and finance.