1. The Classified Balance Sheet
Classified as in
“ordered” not as
in “secret”

2. Account-form v. Report-form
Info is side-by-side, horizontal
Info is one-above-the-other, vertical

3. Classified Balance Sheet
An improved way to present B/S info
Basically it organizes the accounts that go on a balance sheet under 4 headings:
Current Assets –will be used up within a year
Fixed Assets – will last longer than a year
Current Liabilities –will be paid off in a year
Long-term Liabilities –paid off in longer than a year

4. An Outlined example of a Classified Balance Sheet is on p. ______, Fig
Working Capital  the difference between the current assets and current liabilities of a business
More working capital is better

5. Let's look at the basic classifications:
A classified Balance Sheet “classifies” accounts into various sub-categories. Often, these categories are related to how long an asset will be with the company, or how long we have before a liability must be paid.
Let's look at the basic classifications:
Assets are normally divided into two categories:
1. Current Assets (which will be used within one year) and
2. Fixed Assets (which will remain after one year.)
Liabilities should also be divided into two categories:
1. Current Liabilities (Must be paid within one year.) and
2. Long-term Liabilities (Will take longer than a year to pay.)
Owner's equity remains the same as always. (It's not classified.)

6. Once we divide our Assets and Liabilities into these categories, the columns become much easier to understand. You see, for every classification (ie. Assets, Current Assets, etc. ) we have to indicate a section title and a section total on the Balance Sheet.
Every section total will go in the far right column.
Total Current Assets
Total Fixed Assets
Total Assets

7. Once we start listing CONTRA accounts, then we will place the contra account, as well as the account that it is contradicting, in the far left column.
These accounts need to be adjusted to create a “net figure.” Thus, they are placed in the far left column.
Regular account balances, and any adjusted “net figures” go in the middle column.

8. A Closer Look at Long-Term Liabilities
Some of our mortgage payable needs to be paid within one year. Imagine a $ monthly payment...
The current portion is deducted from the long-term amount to create a net figure.

9. In summary… Section totals go in the far right column.
Accounts that need to be adjusted in order to create a “net” figure go in the far left column.
And everything else goes in the middle column!

10. The Office – The Accountants The Books Don’t Balance