What is a classified balance sheet?

Answer 1

A Classified Balance sheet classifies assets into categories. These categories typically are:

Current Assets

· Current assets are cash and other resources expected to be realized in cash, sold, or consumed within one year of the balance sheet date or the company's operating cycle, whichever is longer.

· Listed on B/S in order of liquidity.-Cash is first, then receivables, then prepaids.

· Examples:

Long-term Investments

• Long-term investments are resources that can be converted to cash.
• Conversion is not expected within one year or the operating cycle, whichever is longer.
• Examples:

Property, Plant and Equipment

• Tangible resources of a relatively permanent nature used in the business and not intended for sale are classified as property, plant, and equipment.
• Examples

Intangible Assets

• Intangible assets are non-current resources lacking physical substance.
• Examples

A Classified Balance Sheet classifies liabilities into two categories.

Current Liabilities

Obligations expected to be

• paid from existing current assets, or

• by creation of another current liability,

within one year/operating cycle, whichever is longer.

Long-term Liabilities

§ Obligations expected to be paid after one year.

Answer 2

A Balance Sheet With Classifications (or better known, groupings or categories) Includes Things Such As Current Assets, Current Liabilities, Long Term Liabilities, etc.