Only accrued expenses qualify as current liabilities Steps:

• List all items: prepaid expenses (asset, current), accrued expenses (liability, current), bank balances (asset, current; net if overdraft), loan (liability, long-term due to 10-year term).
• Exclude assets: prepaid expenses and bank balances do not count toward liabilities.
• Classify liabilities: accrued expenses are current (due within one year); loan is non-current.
• Sum current liabilities: only accrued expenses at $8,125.

Why C is correct:

• Accrued expenses represent obligations due soon, fitting the definition of current liabilities under accounting standards (due within one year).

Why the others are wrong:

• A and B incorrectly add bank credit or other non-liabilities, inflating the total.
• D likely includes the long-term loan, which is not current.

Final answer: C