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Balance Sheet: Definition, Example, Elements of a Balance Sheet


Content

equipment is classified in the balance sheet as

(These assets are called property and equipment in The Home Depot’s balance sheet.) The terms plant assets or fixed assets are also used for property, what is a classified balance sheet plant, and equipment. To agree with the order in the heading, balance sheets generally list property first, plant next, and equipment last.

This is because most supplies are consumed within a 12 month period of purchase during the course of operations. Thus, in addition to meeting the capitalization threshold, the equipment must meet the time threshold to be deemed an asset and move up from the income statement to the classified balance sheet. This classification of equipment extends to all types of equipment, including office equipment and production machinery. Current liabilities are debts due within one year or one operating cycle, whichever is longer.

Overview: What is a classified balance sheet?

When equipment in the fixed asset category is expected to be sold off or otherwise disposed of within one year, its book value is still classified as a long-term asset; even in this situation, it is still not classified as a current asset. Often this includes intangible assets such as patents and copyrights. Let’s take a look at each of the sections that make up a typical classified balance sheet and what they typically include. Bonds payable are long-term liabilities and are evidenced by formal printed certificates sometimes secured by liens on property, such as mortgages. Maturity dates should appear on the balance sheet for all major long-term liabilities. Long-term liabilities are debts such as a mortgage payable and bonds payable that are not due for more than one year. Companies should show maturity dates in the balance sheet for all long-term liabilities.

Record here other assets and deferred charges not provided for elsewhere. Record here the initial cost and the cost of improving land. Amounts due from the United States Government shall be maintained in such fashion as will clearly and separately identify service mail pay receivables, subsidy receivables and other than mail transportation receivables. Each air carrier shall subdivide this account in such manner that the balance can be readily segregated as between balances in United States currency and the balances in each foreign currency.

What are some other noncurrent assets?

Include items such as sinking funds, cash and securities posted with courts of law, employee’s funds for purchase of capital stock, pension funds under the control of the air carrier and equipment purchase funds. For purposes of identifying rotable parts and assemblies of insignificant unit value which may be included in this account, a reasonable maximum unit value limitation may be established. This includes debts and other financial obligations that arise as an outcome of business transactions.

An account receivable arises when a company performs a service or sells merchandise on credit. Customers normally provide no written evidence of indebtedness on sales invoices or delivery tickets except their signatures. Notice the term net in the balance sheet of The Home Depot . This term indicates the possibility that the company may not collect some of its accounts receivable.

BUS103: Introduction to Financial Accounting

C) should not include long-term debt that is expected to be paid within the next year. D) are listed in the balance sheet, starting with accounts payable. The most important information needed to determine if companies can pay their current obligations is the a) projected net income for next year. B) relationship between short-term and long-term liabilities. C) relationship between current assets and current liabilities.


2020年8月28日 posted by test

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