First let us see how these assets are to be classified. Current Assets: Current Assets are assets whose benefits are expected to accrue within one year of the Balance sheet. Typical Current Assets include: ;Inventory ; Supplies ; Temporary Investments ; Accounts Receivable ; Prepaid Insurance ; Cash ; petty Cash investments: These assets appear immediately below Current Assets and are less liquid than the Current Assets.Items in this category would include: ;Life Insurance Policies ; Long Time Investments ; Treasury Bills ; Notes Receivables Fixed Assets: These are the properties held by the business and are used primarily for manufacturing goods. Fixed Assets include: ; Land ; Plant and Machinery ; Factory Building ; Delivery Trucks ; Automobiles ; Furniture and Fixtures tangible Assets: These are the assets which cannot be seen, yet make a difference in the way income is generated or profits are earned.
Examples include: ; Goodwill ; Patents ; Copyrights ; Licenses Other Assets: All the other assets not falling within these categories would be “Other Assets” Classification of Liabilities: Liabilities can be classified as: Current Liabilities: Obligations that are due within one year of their occurring or within one year of the balance sheet date is called a current liability(Len case of a company’s operating cycle extending beyond one year, an item is a current liability if comes is due within the operating cycle. Another condition is that this liability would use cash or cash resources or it would lead to the creation of another current liability. (This means that if Note Payable is due within one year of the balance sheet date, but the Note will be retired by a bond sinking fund. Long Term Liability: The liabilities which extend beyond one year are called long term liabilities. Contingent Liabilities: The liabilities which are contingent upon the occurring of a certain event are called contingent liabilities.
For example: providing for lawsuits.