Question

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

Answer 1

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.