155k views
5 votes
An unclassified balance sheet: a) Organizes assets into subgroups b)Broadly groups assets, liabilities and equity c)Includes subheadings such as "Current assets" and "Long-term liabilities" d)is not permitted according to GAAP

User Pushpa
by
8.0k points

1 Answer

1 vote

Final answer:

An unclassified balance sheet broadly groups assets, liabilities, and equity without detailed subgroups and does not adhere to GAAP standards that require separation of short-term and long-term items.

Step-by-step explanation:

An unclassified balance sheet broadly groups assets, liabilities, and equity without organizing them into detailed subgroups. Unlike classified balance sheets, which include detailed subheadings like 'Current assets' and 'Long-term liabilities', an unclassified balance sheet does not.

However, it is important to note that unclassified balance sheets are not in accordance with Generally Accepted Accounting Principles (GAAP), which require a clear distinction between short-term and long-term assets and liabilities to provide useful information to users of financial statements.

User Bob Ross
by
7.6k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.