Final answer:
The statement is false, as a company's balance sheet typically distinguishes between just Current Liabilities and Long-Term Liabilities. The structure of liabilities division depends on how soon the obligations need to be repaid.
Step-by-step explanation:
The statement about the liabilities section of a company's balance sheet having three sections: Current Liabilities, Mid-Term Liabilities, and Long-Term Liabilities is false. Traditional divisions within the liabilities section of a balance sheet are typically Current Liabilities and Long-Term Liabilities. A Current Liability is a debt or obligation that is due within one year, while a Long-Term Liability is due at any point after one year.
Using the T-account format, the balance sheet is often referred to as a T-account due to its shape, separating assets on the left side from liabilities on the right. Within this format, liabilities may include deposits made to the bank, with the net worth or bank capital being the difference between assets and liabilities. It's crucial that assets always equal liabilities plus net worth on a balance sheet. This ensures that the T-account balances to zero, which is necessary for showing a clear financial position of the bank or firm.