Chapter 13 lecture notes
In this chapter you will return to the financial statements, only now you will
be completing “classified” statements, which show financial information in
greater detail.
In the classified balance sheet, assets are divided into two categories –
current and long term or property, plant and equipment (your book simply
calls this plant and equipment). Current assets are those that can be
converted easily into cash or will be used within the year, whereas plant and
equipment deals with long term assets (such as a building).
Liabilities are also divided into current and long term; current liabilities are
those that will be paid within one year (and the current portion of long term
liabilities), and long term liabilities are those debts that are due in more
than one year.