Which of the following refers to an individual's expenses and outstanding debts?

The correct answer is liabilities, as this term specifically refers to an individual's financial obligations, which include expenses and outstanding debts. Liabilities represent what a person owes—these can be loans, credit card debt, mortgages, and any other financial commitments that require payment.

Understanding liabilities is essential in personal finance because they give insight into an individual's financial health and help assess the overall balance between what someone owns (assets) and what someone owes.

In contrast, assets refer to what a person owns, such as cash, property, and investments. Capital usually refers to the financial resources or assets available for use, and equity represents the ownership value after subtracting liabilities from assets, essentially what is left for the owner after all debts are considered. By recognizing liabilities, individuals can better manage their finances and work towards reducing debt to improve their financial situation.