Question

The assets section of a classified balance sheet usually includes the subgroups:

a.Current assets, long-term investments, plant assets, and equity.
b.Current assets, long-term investments, plant assets, and intangible assets.
c.Current assets, liabilities, plant assets, and intangible assets.
d.Current liabilities, long-term investments, plant assets, and intangible assets.
e.Current assets, long-term assets, revenues, and intangible assets.

Answer 1

The assets section of a classified balance sheet typically includes Current assets, Long-term investments, Plant assets, and Intangible assets. These components represent the different categories of assets according to liquidity and operational utility for a business.

Step-by-step explanation:

The assets section of a classified balance sheet usually includes several sub-groups that reflect the liquidity and operational usage of the assets. The correct subgroups are: Current assets, Long-term investments, Plant assets, and Intangible assets. Therefore, the correct answer to the student’s question is option b: Current assets, long-term investments, plant assets, and intangible assets.

These components of a balance sheet represent different types of resources that a company owns. Current assets are those that are expected to be converted into cash or used within one year. Long-term investments may include stocks and bonds that are not intended to be sold in the near future. Plant assets, also known as property, plant, and equipment (PP&E), are long-term assets used in the production of goods and services. Finally, Intangible assets are non-physical assets such as patents, trademarks, and goodwill.