Concept:Salaries in arrears are unpaid employee wages that the business owes for work already done.
Explanation:When salaries have been earned by employees but not yet paid by the business, they become an outstanding expense.
The business has already received the benefit of the employees' services and therefore owes them money.
This amount is expected to be settled within the next operating cycle, usually less than one year.
On the balance sheet, any obligation that must be paid within a year is classified as a current liability.
It is not an asset, because the business does not own the value or receive future benefits from unpaid salaries.
It is also not a fixed asset, since it has no physical or long-term productive use.
It is not a long-term liability, because salaries in arrears are settled quickly and do not extend beyond the current accounting period.
Hence, salaries in arrears are correctly shown as a current liability.
Answer:B. Current liability