Question

As we have discussed, the classified balance sheet groups classes of assets, liabilities and equity. The most common classifications used within a classified balance sheet are:

Current assets

Long-term investments

Fixed assets (or Property, Plant, and Equipment)

Intangible assets

Other assets

Current liabilities

Long-term liabilities

Shareholders' or Stockholder's equity

The sum of these classifications equals what? And, are all classified balance sheets categorized the same?

Answer 1

It should be noted that In a Balance Sheet,

Assets – Liabilities = Capital

Hence for the question,

Fixed/Current Assets+ Long-term investments+ Intangible/Other Assets -- Current /Long-term Liabilities = Shareholders' equity

As per format of Balance Sheet, Assets may be shown on one side & Liabilities and Capital may be on other side (Liabilities + capital= Assets)

If we add up all those items mentioned as Assets + Liabilities + Capital, we will reach on 2 * Total Assets, which is equal to double of One side total in a Balance Sheet since Liabilities + Capital is equal to Assets.

Yes, All Balance sheet follows the same categorization since definition of assets, liabilities and capital doesn’t change conceptually and Accounting Equation Assets- Liabilities = Capital doesn’t change too.

While Inside a category there may be changes, since asset may be a current/ fixed or investment may be short term/ long term. Liability may be long term and short term too