A classified balance sheet
A)Shows the effect of profit and withdrawals on owner's capital.
B)Presents revenues, expenses and profit.
C)Shows operating, investing, and financing activities.
D)Organizes assets and liabilities into important subgroups.
E)Measures a company's ability to pay its bills on time.

Question

Quizplus · Accepted Answer

A classified balance sheet organizes assets and liabilities into important subgroups such as current assets, long-term assets, current liabilities, and long-term liabilities. This helps readers to better understand a company's financial position and liquidity. Choice A relates to a statement of owner's equity, choice B to an income statement, choice C to a statement of cash flows, and choice E to a liquidity ratio or cash flow analysis.

A Classified Balance Sheet