The following list has some of the Assets and Liabilities that may be difficult to classify on a balance sheet. If people are inconsistent in classifying these items, it will be difficult to analyze trends and compare financial ratios between different farms. See how these farms/ranches are performing in relation to each other and make various comparisons.
out this sheet and decide how they should be classified.
- 1. Decide if the item is an asset or a liability. THEN
- 2. Decide if it is a current asset/liability or a non-current asset/liability
** Hint: Remember the definition of an asset and a liability. Remember the time factor portion of current and non-current asset and liability definitions. This should help in determining each item below. Reread the portions of Assets and Liabilities if you are still unclear.
Legend: Asset – (A) or Liability – (L) | Current – (C) or Non-current – (NC)
FM | Classifying Assets & Liabilities Exam