Question

Green Living Construction Company installs solar panels in large newly constructed buildings. The company employs several expert installers who work on a full-time basis. Although the installers work everyday, the company pays them at the end of the month, for the previous month's work. Employee salaries are recorded as ___________ on Green Living's Balance Sheet.

A. capital cash flows
B. current liabilities
C. retained earnings
D. long-term liabilities

Answer 1

Answer: (B) Current liabilities

Step-by-step explanation:

The current liabilities is refers to the short term loans that are taken from the banks for the business during the fiscal year in an organization and it includes the customer deposits, credit utilization, taxes and the interest payable.

In an organization, the current liabilities is in the form of money which is owed to the supplier in the account payable form.

According to the given question, the employees salaries of the green living construction company are basically recorded in the form of current liabilities of the company balance sheet.

Therefore, Option (B) is correct.