Sun Smarts Solar Installs Solar Panels in Large Newly Constructed

question 164

Multiple Choice

Sun Smarts Solar installs solar panels in large newly constructed buildings. The company employs several expert installers who work on a full-time basis. Although the installation team works every day, the company pays them at the end of the month, for the previous month's work. Employee salaries are recorded as ________ on Sun Smarts's balance sheet.

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

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Definitions:

Bonds Retired

The act of paying off or buying back issued bonds before their maturity date.

Machinery

Industrial or commercial devices or equipment designed to perform specific tasks, often contributing to the production of goods.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Current Assets

Assets that are expected to be converted into cash, sold or consumed within one year or the operating cycle, whichever is longer.