A plain balance sheet lists every asset and every liability, but it doesn't tell a reader which debts are due soon and which assets could actually cover them. A classified balance sheet lists items in special categories, such as current and fixed assets, and current and long-term liabilities, so a reader can quickly judge whether the business can meet its near-term obligations.
Current vs. Fixed Assets
- A current asset is cash or some other asset that, in the normal course of operations, will be converted to cash, sold, or consumed within the year. Current assets are listed in order of liquidity: Cash, Accounts Receivable, Supplies, then Prepaid Expenses (expense payments made in advance).
- Fixed assets are assets that have a long life (over one year) — equipment, trucks, buildings, land. On a classified balance sheet, each fixed asset is listed at cost, less its accumulated depreciation, to show book value.
Current vs. Long-Term Liabilities
- Current liabilities are liabilities due to be paid within a year — Accounts Payable, the current portion of a bank loan, wages payable.
- Long-term liabilities are liabilities that are not due to be paid for more than one year — the remaining balance of a bank loan or mortgage, for example.
| Trillium Bike Repair — Balance Sheet — As at December 31, 2026 | |
|---|---|
| Current Assets | |
| Cash | $9,500 |
| Accounts Receivable | $700 |
| Supplies | $180 |
| Total Current Assets | $10,380 |
| Fixed Assets | |
| Equipment (net of $1,080 accumulated depreciation) | $4,920 |
| Truck (net of $1,800 accumulated depreciation) | $7,200 |
| Total Fixed Assets | $12,120 |
| Total Assets | $22,500 |
| Current Liabilities | |
| Accounts Payable | $400 |
| Long-Term Liabilities | |
| Bank Loan | $8,000 |
| Total Liabilities | $8,400 |
| J. Reyes, Capital | $14,100 |
| Total Liabilities and Owner's Equity | $22,500 |
Supporting Schedules
A supporting schedule (or simply a schedule) provides details about an item on a main statement — for example, a schedule might break down exactly which fixed assets make up the "Total Fixed Assets" figure, listing each asset's cost, accumulated depreciation, and book value separately, without cluttering the main balance sheet.