One significant difference between a classified and a non-classified balance sheet is the distinction between which of the following items?
A)Assets and liabilities
B)Current and noncurrent (or long-term)items
C)Liabilities and owners' equity
D)Resources invested by the owners and amounts borrowed from creditors

Question

Quizplus · Accepted Answer

The significant difference between a classified and a non-classified balance sheet is the distinction between current and noncurrent (or long-term) items. In a classified balance sheet, items are categorized as either current (i.e., assets and liabilities that will be used or paid within a year) or noncurrent (i.e., assets and liabilities that will be used or paid over a period longer than a year). This distinction helps users of the financial statements understand the company's liquidity and long-term solvency. In a non-classified balance sheet, items are not categorized as current or noncurrent, which may make it harder for users to assess a company's financial position.

One Significant Difference Between a Classified and a Non-Classified Balance