Balance Sheet Items Classifications
The items which are generally present in all the Balance sheet includes Assets like Cash, inventory, accounts receivable, investments, prepaid expenses, and fixed assets; liabilities like long-term debt, short-term debt, Accounts payable, Allowance for the Doubtful Accounts, accrued and liabilities taxes payable; and the Shareholders’ equity-like Share capital, additional paid-in capital and retained earnings.
The most common balance Sheet items are listed below –
- Cash and Equivalents (Current Assets)
- Marketable Securities (Current Assets)
- Account Receivables (Current Assets)
- Inventories (Current Assets)
- Prepaid Expense (Current Assets)
- Property, Plant, and Equipment (Fixed Assets)
- Intangible Assets (Fixed Assets)
- Account Payable (Current Liabilities)
- Unearned Revenue (Current Liabilities)
- Short Term Debt (Current Liabilities)
- Current Portion of Long-term Debt (Current Liabilities)
- Other Accrued Expenses and Liabilities (Current Liabilities)
- Long term Debt (Long Term Liabilities)
- Paid-in Capital (Shareholders Equity)
- Retained Earnings (Shareholders Equity)
Balance Sheet is based on fundamental accounting Equations which is below-
Top 15 Balance Sheet Items List
In Balance Sheet, normally, Assets are shown on the left-hand side with decreasing order of their liquidity. That means Current Assets will come on the top, and then fixed Assets will be shown. Liabilities and equity are shown on the right-hand side. Liabilities are shown before equity and are in decreasing order of liquidity. Shareholder’s equity is shown below liabilities. As shown in IBM’s Balance Sheet,
Below are the main components of the Balance Sheet:-
- Current Assets
- Fixed Assets
- Current Liabilities
- Long Term Liabilities
- Shareholders’ Equity
Current Assets
Assets are the resources which are cash or can be converted to cash by selling. Companies can acquire assets using cash; that’s why they are known as “Use of Cash.” Current Assets are assets that are expected to realize in cash or sold to customers in a given operating cycle or one year. In a typical balance sheet, Current Assets are put before Fixed Assets. Below are the major items in Current Assets-
#1 – Cash and Equivalents
Cash is the funds that are readily available for disbursements. Cash and equivalents are the most liquid asset. Cash equivalents are assets which are having a maturity period of fewer than 90 days.
#2 – Marketable Securities
Marketable Securities are assets that can be converted into cash in the 1 year and are readily available. Marketable securities provide some amount of interest amount to the firm.
#3 – Account Receivables
The amount which is owed to the entity by its customers. If the amount is owed to parties other than customers, then it is known as Notes receivables.
#4 – Inventories
Inventories are assets which a business owner and will sell in the future. The company is expected to sell its inventory in the near future. That’s why it is put under Current Assets.
#5 – Prepaid Expense
The prepaid expense consists of the expense that the company has already paid, but until now, services for that payment has not been received. The company is expected to get the service in the near future. Examples of prepaid expenses can be advanced insurance policy payment or advance salary to the workers of the company.

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In IBM, below are the items under Current Assets:
Fixed Assets
Assets such as Property, Plant, and Equipment come under this category. These assets are having a life of more than 1 year. They are acquired so that they can generate cash flow for many years in the future. Since the cash flow from these assets comes in future years, so they are capitalized for their useful life instead of making expenses at the time of purchase.
Fixed Assets can be broadly classified into the following:
#6 – Property, Plant, and Equipment
These are the assets that are tangible in nature and relatively long-lived. It is includes Buildings, land, hardware’s, Computers, etc.
#7 – Intangible Assets
Intangible Assets are assets that cannot be seen or touched physically. An Example of the intangible asset is the firm’s intellectual property, such as a patent or any software. The cost of individual assets is also amortized over the years.
Current Liabilities
Current Liabilities is an obligation for the firm, which must be paid in a given accounting period or usually in 1 year.
#8 – Account Payable
Accounts Payable is an operating liability which the company needs to pay to its supplier for the goods and services received. It needs to be payable for the given period or in a year.
#9 – Unearned Revenue
If the revenue has been generated and still services/goods need to be delivered, then it is accounted for under unearned revenue.
#10 – Short Term Debt
Debt whose maturity is less than 1 year comes under this category.
#11 – Current Portion of Long-term Debt
When companies take long term loans such as bonds, then they will have to pay interest or coupon payment for that loan each year. That amount which needs to be paid in a year will come under Current Liabilities.
#12 – Other Accrued Expenses and Liabilities
It could include money owed to employees etc.
Long term Liabilities
Long term liabilities are the liabilities that the firm owned and are not expected to pay under one year.
#13 – Long Term Debt
Long term liabilities include Long term debt and bonds issued by companies. Long term debt can be taken from many sources such as banks and will have a different kind of interest and repayment structure. Bonds are the longer-term debt such as 30 years in which firm issues the bond to lenders and then make coupon payment each period as stated in bond structure. At the time of maturity, lenders get the last coupon payment and get a face amount of bond.
Shareholder’s Equity
Shareholder’s Equity is the difference between the Firm’s Assets and liabilities. It is a residual value to its shareholders. Shareholders’ Equity mainly consists of Share Capital and Retained Earnings.
#14 – Paid-in Capital
Paid-in capital is the value of shares that the company has made by issuing shares to its shareholders. Shares can be of 2 types Common Stock and Preferred Stock. Preferred Stockholders have preferential rights to assets for the company before common shareholders. Stocks have a very negligible par value. Their additional paid-in capital is the difference between the value at which the company sells to shareholders and par value.
#15 – Retained Earnings
Retained Earnings is the amount that comes from the company’s internal profit. From net income, the firm has 2 options either to pay the dividend or retain it to invest in some projects. Retained Earning is the difference between Net Income and dividends paid.
Final Thoughts
As an investor, one should understand the meaning of all the items of the balance sheet, and it is interconnected with the Income Statement and Cash Flow Statement. Balance Sheet is also most prone to accounting adjustment (or we can say that manipulation), so we should also read the footnotes carefully in company reports to find out how the numbers are put in the accounts.
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