Question

The following are the typical classifications used in a balance sheet: a. Current assets f. Current liabilities b. Investments g. Long-term liabilities c. Property, plant, and equipment h. Paid-in capital d. Intangible assets i. Retained earnings e. Other assets Required: For each of the following balance sheet items, use the letters above to indicate the appropriate classification category.

Answer 1

Answer:

Category                                               Items

1. Assets                                                 a, b, c, e, d

2. Liabilities and equity                        f, g, h, i

Explanation:

A balance sheet in financial account can be defined as an expression, usually in writing of the business financial condition. It is usually divided into the following categories, namely; assets, liabilities and equity. Each category is also further divided into sub-categories for specificity. A balance sheet generally provides an organized way in which financial information can be presented. When financial information is presented using a balance sheet, a user finds it much easier to extract information from the statement as opposed to simply listing all the financial information without any order.

The financial information given can be organized as follows;

Category                                                Items

1. Assets                                                 a, b, c, e, d

2. Liabilities and equity                         f, g, h, i

In general, assets include; currents assets, investments, property, plant and equipment that are fixed assets, other assets required and intangible assets. Additionally, the liabilities and equity include; current liabilities, long-term liabilities, paid-in capital and retained earnings.