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CLEP Financial Accounting Exam Prep

Category - CLEP Financial Accounting Test Practice Questions

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What is a classified balance sheet?
  1. A balance sheet that divides long term and short term assets into separate categories.
  2. A balance sheet that is not for distribution outside of the company.
  3. A balance sheet that classifies expenses according to function.
  4. A balance sheet that classifies revenue per the income stream.
  5. A balance sheet that divides direct and indirect expenses.
Explanation
Answer - A - A classified balance sheet is one that classifies or categorizes long term and short term assets separately.

Key Takeaway: A classified balance sheet contains classifications, groupings, or categories, such as current assets, property plant and equipment, current liabilities, long term liabilities, etc.
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