{"id":3654,"date":"2020-10-21T18:34:34","date_gmt":"2020-10-21T18:34:34","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=3654"},"modified":"2020-12-03T22:01:13","modified_gmt":"2020-12-03T22:01:13","slug":"classified-balance-sheet","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/classified-balance-sheet\/","title":{"raw":"Classified Balance Sheet","rendered":"Classified Balance Sheet"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Identify proper financial statement presentation of plant assets<\/li>\r\n<\/ul>\r\n<\/div>\r\nThe balance sheet we learned at the beginning of the course in both the report form (assets are first and liabilities and equity are below) and the account form (side-by-side was fairly simple and straightforward. Balance sheets produced by publicly traded companies contain a lot of information and are almost always in the report form. Like the multi-step income statement, they follow a certain format that includes subtotals. The classified balance sheet groupings and subtotals make the balance sheet easier for investors to read and analyze. The classified balance sheet still proves the accounting equation but it separates assets and liabilities into the following subgroups:\r\n\r\n<img class=\"alignright wp-image-4732 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30204532\/calculator-1044173_1920-300x200.jpg\" alt=\"A calculator and a balance sheet. \" width=\"300\" height=\"200\" \/>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Current Assets: Can be converted to cash within a year or within the operating cycle, whichever is longer. Current assets include cash, accounts receivable, interest receivable, supplies, inventory, and other prepaid expenses.<\/li>\r\n \t<li style=\"font-weight: 400;\">Long-Term Investments: Investments that are not due for more than a year are reported in this section. Long-term investments would include notes receivable or investments in bonds or stocks.<\/li>\r\n \t<li style=\"font-weight: 400;\">Plant Assets: Plant assets (also called PP&amp;E or fixed assets) refer to property that is tangible (can be seen and touched) and is used in the business to generate revenue. Plant assets include depreciable assets and land used in the business. The plant asset is recorded with its accumulated depreciation (if any) subtracted below it to get the asset\u2019s book value.<\/li>\r\n \t<li style=\"font-weight: 400;\">Intangible Assets: Intangible assets are items that have a financial value but do not have a physical form. These would be things like trademarks, patents, and copyrights.<\/li>\r\n \t<li style=\"font-weight: 400;\">Current Liabilities: Like current assets, these are liabilities whose payment are due within a year or within the operating cycle, whichever is longer. Current liabilities include accounts payable, salaries payable, taxes payable, unearned revenue, etc.<\/li>\r\n \t<li style=\"font-weight: 400;\">Long-Term Liabilities: Liabilities due more than a year from now would be reported here, including notes payable, mortgage payable, bonds payable, etc.<\/li>\r\n<\/ul>\r\nAs an example, here is the classified balance sheet for Home Depot, Inc. Look through it and identify the various subgroups we just discussed for the assets and liabilities on a classified balance sheet.\r\n\r\n[caption id=\"attachment_6403\" align=\"aligncenter\" width=\"615\"]<img class=\"wp-image-6403\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/19000156\/Screen-Shot-2020-11-18-at-4.01.43-PM-800x1024.png\" alt=\"See caption for link to long description.\" width=\"615\" height=\"787\" \/> See the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Long+Descriptions\/The+Home+Depot+Assets+%2B+Liabilities+%2B+Common+Stock+CBS.txt\" target=\"_blank\" rel=\"noopener\">balance sheet long description<\/a> here.[\/caption]\r\n\r\nNow, try out what you learned:\r\n<div class=\"textbox tryit\">\r\n<h3>practice questions<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23785\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li style=\"font-weight: 400;\">Identify proper financial statement presentation of plant assets<\/li>\n<\/ul>\n<\/div>\n<p>The balance sheet we learned at the beginning of the course in both the report form (assets are first and liabilities and equity are below) and the account form (side-by-side was fairly simple and straightforward. Balance sheets produced by publicly traded companies contain a lot of information and are almost always in the report form. Like the multi-step income statement, they follow a certain format that includes subtotals. The classified balance sheet groupings and subtotals make the balance sheet easier for investors to read and analyze. The classified balance sheet still proves the accounting equation but it separates assets and liabilities into the following subgroups:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-4732 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30204532\/calculator-1044173_1920-300x200.jpg\" alt=\"A calculator and a balance sheet.\" width=\"300\" height=\"200\" \/><\/p>\n<ul>\n<li style=\"font-weight: 400;\">Current Assets: Can be converted to cash within a year or within the operating cycle, whichever is longer. Current assets include cash, accounts receivable, interest receivable, supplies, inventory, and other prepaid expenses.<\/li>\n<li style=\"font-weight: 400;\">Long-Term Investments: Investments that are not due for more than a year are reported in this section. Long-term investments would include notes receivable or investments in bonds or stocks.<\/li>\n<li style=\"font-weight: 400;\">Plant Assets: Plant assets (also called PP&amp;E or fixed assets) refer to property that is tangible (can be seen and touched) and is used in the business to generate revenue. Plant assets include depreciable assets and land used in the business. The plant asset is recorded with its accumulated depreciation (if any) subtracted below it to get the asset\u2019s book value.<\/li>\n<li style=\"font-weight: 400;\">Intangible Assets: Intangible assets are items that have a financial value but do not have a physical form. These would be things like trademarks, patents, and copyrights.<\/li>\n<li style=\"font-weight: 400;\">Current Liabilities: Like current assets, these are liabilities whose payment are due within a year or within the operating cycle, whichever is longer. Current liabilities include accounts payable, salaries payable, taxes payable, unearned revenue, etc.<\/li>\n<li style=\"font-weight: 400;\">Long-Term Liabilities: Liabilities due more than a year from now would be reported here, including notes payable, mortgage payable, bonds payable, etc.<\/li>\n<\/ul>\n<p>As an example, here is the classified balance sheet for Home Depot, Inc. Look through it and identify the various subgroups we just discussed for the assets and liabilities on a classified balance sheet.<\/p>\n<div id=\"attachment_6403\" style=\"width: 625px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-6403\" class=\"wp-image-6403\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/19000156\/Screen-Shot-2020-11-18-at-4.01.43-PM-800x1024.png\" alt=\"See caption for link to long description.\" width=\"615\" height=\"787\" \/><\/p>\n<p id=\"caption-attachment-6403\" class=\"wp-caption-text\">See the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Long+Descriptions\/The+Home+Depot+Assets+%2B+Liabilities+%2B+Common+Stock+CBS.txt\" target=\"_blank\" rel=\"noopener\">balance sheet long description<\/a> here.<\/p>\n<\/div>\n<p>Now, try out what you learned:<\/p>\n<div class=\"textbox tryit\">\n<h3>practice questions<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23785\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23785&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23785\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3654\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Classified Balance Sheet. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Accounting Principles: A Business Perspective. <strong>Authored by<\/strong>: James Don Edwards, University of Georgia &amp; Roger H. Hermanson, Georgia State University. <strong>Provided by<\/strong>: Endeavour International Corporation. <strong>Project<\/strong>: The Global Text Project. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li><strong>Authored by<\/strong>: Steve Buissinne. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/photos\/calculator-calculation-insurance-1044173\/\">https:\/\/pixabay.com\/photos\/calculator-calculation-insurance-1044173\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: https:\/\/pixabay.com\/service\/terms\/#license<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":90270,"menu_order":20,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Classified Balance Sheet\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Accounting Principles: A Business Perspective\",\"author\":\"James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University\",\"organization\":\"Endeavour International Corporation\",\"url\":\"\",\"project\":\"The Global Text Project\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"Steve Buissinne\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/photos\/calculator-calculation-insurance-1044173\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"https:\/\/pixabay.com\/service\/terms\/#license\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-3654","chapter","type-chapter","status-publish","hentry"],"part":766,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/90270"}],"version-history":[{"count":9,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3654\/revisions"}],"predecessor-version":[{"id":6674,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3654\/revisions\/6674"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/766"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3654\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=3654"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=3654"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=3654"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=3654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}