Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.
a. Current Assets: Current assets are the assets which can be easily converted into cash or consumed within one year. These assets are used in carrying out daily operations of a business.
b. Investments: Companies invest in stocks and bonds of other companies or governmental entity to deploy their excess fund, and/or for a specific business strategy.
c. Property, Plant and Equipment: Property, plant and equipment are the fixed tangible assets which are used for more than one year and are used for production purposes.
d. Intangible Assets: Intangible assets are fixed assets which do not have physical existence and generates a worth for the organization which is determined during acquisition or merger.
e. Other assets: Other assets are a separate group of assets listed in a balance sheet which are not suitable in the main asset categories.
f. Current liability: Current liability is an obligation that the companies need to pay from the remaining current assets or creation of other current liabilities within a fiscal year or the operating cycle whichever is higher.
g. Long-term liabilities: Long-term liabilities are obligations that the company needs to pay after at least one year or more. Long term liabilities are otherwise called as long-term debt.
h. Paid-in-capital: Paid in capital is the amount received from investors during the issue or sale of shares. It comprises of fund received from the sale of stock and not through the proceeds from ongoing operations.
i.
To Classify: The balance sheet items in the appropriate category.
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Chapter 3 Solutions
INTERMEDIATE ACCOUNTING
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