Question

The following are the typical classifications used in a balance sheet: a. Current assets f. Current liabilities b. Investments and funds g. Long-term liabilities c. Property, plant, and equipment h. Paid-in-capital d. Intangible assets i. Retained earnings e. Other assets

Answer 1

The following items are seen in a balance sheet:

a. Current assets f. Current liabilities

The balance sheet classifies assets and liabilities. Current assets are those that can be converted in cash in 1 year or less, and current liabilities are obligations that have to paid out in 1 year or less.

g. Long-term liabilities

Long-term liabilities are obligations that can be paid out in more than 1 year.

c. Property, plant, and equipment

PP&E are physical assets that are expected to produce economic benefits for more than one year.

d. Intangible assets

Intangible assets are assets that do not have a physical form, for example, trademarks or patents.

e. Other assets

Other assets are some specific assets that do not fall under any of the previous classifications, an example of these assets are bond issuance costs.