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Horngren'S Financial And Managerial Accounting
Found in: Page 216

Short Answer

Identify two liability categories on the classified balance sheet, and give examples of each category.

Current liabilities includes accounts payable, salaries payable, interest payable and so on. Long term liabilities includes long term notes payable, bonds, long term debts etc.

See the step by step solution

Step by Step Solution

Step-by-Step-SolutionStep 1: Explanation on Classified balance sheet

Classified balance sheet is type of balance sheet which places the assets and liabilities as per the specific category.

Step 2: Explanation on Categories of Liabilities

Current liabilities are the obligations which are required to be paid within a year or within an operating cycle, whereas non- current liabilities are paid in longer tenure such as more than a year or operating cycle.

Most popular questions for Business-studies Textbooks

On December 1, Curt Wilson began an auto repair shop, Wilson’s Quality Automotive. The following transactions occurred during December: Dec. 1 Wilson contributed $63,000 cash to the business in exchange for shares of common stock. 1 Purchased $14,400 of equipment paying cash. 1 Paid $3,600 for a twelve-month insurance policy starting on December 1. 9 Paid $15,000 cash to purchase land to be used in operations. 10 Purchased office supplies on account, $2,200. 19 Borrowed $24,000 from the bank for business use. Wilson signed a notes payable to the bank in the name of the corporation. The note is due in five years. 22 Paid $2,000 for advertising expenses. 26 Paid $1,000 on account. 28 The business received a bill for utilities to be paid in January, $260. 31 Revenues earned during the month included $18,500 cash and $3,800 on account. 31 Paid employees’ salaries $3,900 and building rent $800. Record as a compound entry. 31 The business received $1,380 for auto screening services to be performed next month. 31 Paid cash dividends of $5,000 to stockholders. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation—Equipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Common Stock; Retained Earnings; Dividends; Income Summary; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense—Equipment. Adjustment data: a. Office Supplies used during the month, $600. b. Depreciation for the month, $240. c. One month insurance has expired. d. Accrued Interest Expense, $120. Requirements 1. Prepare the journal entries, and post to the T-accounts. 2. Prepare an unadjusted trial balance. 3. Complete the worksheet for the month ended December 31, 2018 (optional). 4. Prepare the adjusting entries, and post to the T-accounts. 5. Prepare an adjusted trial balance. 6. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 7. Prepare the closing entries, and post to the T-accounts. 8. Prepare a post-closing trial balance.


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