Liabilities Are Generally Classified on a Balance Sheet as

question 130

Multiple Choice

Liabilities are generally classified on a balance sheet as

• A) small liabilities and large liabilities.
• B) present liabilities and future liabilities.
• C) tangible liabilities and intangible liabilities.
• D) current liabilities and long-term liabilities.

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Definitions:

Asset Improvements

Expenditures made to enhance the usefulness, performance, or lifespan of an asset without acquiring a new one.

Ordinary Maintenance

Routine upkeep and repairs necessary to keep equipment, buildings, and other assets in working order, distinct from major renovations or upgrades.

Trade-In Allowance

The value offered for an old item when it is traded for a new item, reducing the purchase price of the new item.

Book Value

Book Value refers to the net value of a company or an asset calculated by total assets minus intangible assets (patents, goodwill) and liabilities, used to estimate the value of a company on its balance sheet.