The classified Balance Sheet will divide its Liabilities Section as the following subsections
A) Current Liabilities and Long-Term Liabilities
B) Current Liabilities and Other Liabilities
C) Other Liabilities and Long-Term Liabilities
D) Present Liabilities and Tomorrow's Liabilities

Question

Quizplus · Accepted Answer

The most common way to divide the liabilities section of a classified balance sheet is into current liabilities and long-term liabilities. Current liabilities are those that are expected to be paid off within one year or the operating cycle, whichever is longer. Long-term liabilities are those that are not due within one year or the operating cycle. This provides readers with a clearer picture of the company's short-term and long-term obligations. Option B is incorrect because "Other Liabilities" is not a commonly used subsection in the liabilities section of a classified balance sheet. Option C divides the liabilities section into two types of long-term liabilities, which is not an effective breakdown. Option D is incorrect because it is not a common or accepted way to divide the liabilities section.

The Classified Balance Sheet Will Divide Its Liabilities Section as the Following