You are here

Balance Sheet Accounts

6 May, 2015 - 17:39

Balance sheet accounts are classified as assets, liabilities, or owner's equity. Income statement accounts are classified as either expenses or revenues. Assets are divided into two categories, depending upon their expected life. Current assets are those that are usually sold or consumed within a year. Fixed assets are held for periods longer than a year. Among fixed assets, plant assets depreciate, while land does not. Liabilities are also divided into two categories: current, for those payable within a year, and long-term, for those with maturities beyond one year.

Current assets typically include cash, notes receivable, accounts receivable, inventories and prepaid expenses (such as insurance premiums). Fixed assets typically include property, plant and equipment, investments, patents and tradmarks. Both tangible and intangible items can be assets, provided they have some monetary value. Current liabilities include bank credit outstanding, accounts payable, interes payable, wages payable and taxes payable. Long term liabilities include loans beyond one year, notes and bonds issued by company.