• Skip to primary navigation
  • Skip to main content
  • Skip to footer
WallStreetMojo

Wallstreet Mojo

Wallstreet Mojo

MENUMENU
  • Resources
        • Accounting Basics

          • Income Statement
          • Balance Sheet
          • Cash Flow in Accounting
        • Accounting-Basics
        • Accounting Concepts

          • Assets in Accounting
          • Liabilities in Accounting
          • Shareholders Equity
        • Accounting-Concepts
        • Accounting Careers

          • Accounting Interview Q&A
          • Financial Accounting Careers
          • Cost Accounting
        • Accounting-Careers
        • Financial Statement Analysis

          • Ratio Analysis
          • Profitability Ratios
          • Turnover Ratios
        • Financial-Statement-Analysis
        • Investment Banking Guides

          • Investment Banking
          • What is LBO?
          • What is Pitch Book?
        • Investment-Banking-Guides
        • Others

          • Resources (A to Z)
          • Equity Research
          • Corporate Finance
          • Financial Modeling
          • Financial Certifications
          • Valuation
  • Free Courses
  • All Courses
        • Certification Courses

          Certificate
        • All in One Financial Analyst Bundle

          Financial-Analyst-Bundle
        • Accounting Course

          Accounting-Course
        • US GAAP Course

          US-GAAP-Course
        • Others

          • Cost Accounting Course
          • IFRS Course
          • Equity Research Course
          • Finance for Non finance

          • Financial Modeling Course
          • Business Valuation Course
          • Investment Banking Course
          • View All
  • 250+ Courses All in One Bundle
  • Login

Balance Sheet Items

Home » Accounting » Balance Sheet in Accounting » Balance Sheet Items

By Jyoti Singh Leave a Comment

Balance-Sheet-Items

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.

Balance Sheet Items Classifications

A balance sheet illustrates the financial position of an entity at a specific point of time. The following Balance Sheet Items provides an outline of the most common list found on the Balance Sheet. It is impossible to provide a complete set of examples that address every variation on every situation since there are many variations of such items on the Balance Sheet. Each item on the balance sheet states the topic, the relevant reasons, and additional comments as needed.

The most common balance Sheet items are listed below –

  1. Cash and Equivalents (Current Assets)
  2. Marketable Securities (Current Assets)
  3. Account Receivables (Current Assets)
  4. Inventories (Current Assets)
  5. Prepaid Expense (Current Assets)
  6. Property, Plant, and Equipment (Fixed Assets)
  7. Intangible Assets (Fixed Assets)
  8. Account Payable (Current Liabilities)
  9. Unearned Revenue (Current Liabilities)
  10. Short Term Debt (Current Liabilities)
  11. Current Portion of Long-term Debt (Current Liabilities)
  12. Other Accrued Expenses and Liabilities (Current Liabilities)
  13. Long term Debt (Long Term Liabilities)
  14. Paid-in Capital (Shareholders Equity)
  15. Retained Earnings (Shareholders Equity)

Balance Sheet is based on fundamental accounting Equations which is below-

fundamental accounting Equations

Top 15 Balance Sheet Items List

In Balance Sheet, normally Assets are shown in the left-hand side with decreasing order of their liquidity. That means Current Assets will come on the top and then fixed Asset 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

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 which are expected to realize in cash or sold to customers in a given operating cycle or in 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 which 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 which can be converted into cash in the 1-year time period 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 owned to parties other than customers than 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.

Popular Course in this category
Cyber Monday Sale
All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) 250+ Courses | 40+ Projects | 1000+ Hours | Full Lifetime Access | Certificate of Completion
4.9 (1,067 ratings)
Course Price

View Course

Related Courses
Accounting CourseUS GAAP CourseCost Accounting Course

#5 – Prepaid Expense

Prepaid expense consists of the expense that the company has already paid but till now services for that payment has not been received. The company is expected to get the service in near future. Examples of prepaid expenses can be advance insurance policy payment or advance salary to the workers of the company.

In IBM Balance sheet, below are the items under Current Assets:

IBM Balance sheet

Fixed Assets

Non Current Assets

Assets such as Property, Plant and Equipment comes under this category. These assets are having a life of more than 1 years. 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 expense 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.  This includes Buildings, land, hardware’s, Computers etc.

#7 – Intangible Assets

Intangible Assets are assets which cannot be seen or touched physically. 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

Current Liabilities is an obligation for the firm, which must be paid in 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. This 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 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

This could include money owed to employees etc.

Long term Liabilities

Non Current Liabilities List

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 face amount of bond.

Shareholder’s Equity

Balance Sheet - 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 shareholder and par value.

#15 – Retained Earnings

Retained Earnings is the amount that comes from the company’s internal profit. From net income, the firm’s is having 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.

Retained Earnings formula

Final Thoughts

As an investor one should understand the meaning of all the items of balance sheet and how the balance sheet is interconnected with 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 carefully the footnotes in company reports to find out how the numbers are put in the accounts.

Recommended Articles

This has been a guide to Balance Sheet Items. Here we discuss the list of top 15 balance sheet items along with practical examples and explanation. You may learn more about accounting from the following articles –

  • Top Components of Inventory List
  • Liability as Unearned Revenue
  • Examples of Relative Change
  • Example of Accounts Payable Ledger
  • Ratios of Balance Sheet
  • Guide to reading a Balance Sheet
  • Balance Sheet Accounting Equation
  • What is Classified Balance Sheet?
0 Shares
Share
Tweet
Share

Filed Under: Accounting, Balance Sheet in Accounting

Reader Interactions
Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Footer
COMPANY
About
Reviews
Blog
Contact
Privacy
Terms of Service
FREE COURSES
Free Finance Online Course
Free Accounting Online Course
Free Online Excel Course
Free VBA Course
Free Investment Banking Course
Free Financial Modeling Course
Free Ratio Analysis Course

CERTIFICATION COURSES
All Courses
Financial Analyst All in One Course
Investment Banking Course
Financial Modeling Course
Private Equity Course
Business Valuation Course
Equity Research Course
CFA Level 1 Course
CFA Level 2 Course
Venture Capital Course
Microsoft Excel Course
VBA Macros Course
Accounting Course
Advanced Excel Course
Fixed Income Course
RESOURCES
Investment Banking
Financial Modeling
Equity Research
Private Equity
Excel
Books
Certifications
Accounting
Asset Management
Risk Management

Copyright © 2019. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. CFA® And Chartered Financial Analyst® Are Registered Trademarks Owned By CFA Institute.
Return to top

Free Accounting Course

You will Learn Basics of Accounting in Just 1 Hour, Guaranteed!

By continuing above step, you agree to our Terms of Use and Privacy Policy.

Free Investment Banking Course

IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials

By continuing above step, you agree to our Terms of Use and Privacy Policy.

Free Investment Banking Course

IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials

By continuing above step, you agree to our Terms of Use and Privacy Policy.
WallStreetMojo

Free Investment Banking Course

IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials

By continuing above step, you agree to our Terms of Use and Privacy Policy.

* Please provide your correct email id. Login details for this Free course will be emailed to you

WallStreetMojo

Free Investment Banking Course

IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials

By continuing above step, you agree to our Terms of Use and Privacy Policy.

* Please provide your correct email id. Login details for this Free course will be emailed to you

Free Accounting Course

You will Learn Basics of Accounting in Just 1 Hour, Guaranteed!

By continuing above step, you agree to our Terms of Use and Privacy Policy.

WallStreetMojo

Free Accounting Course

You will Learn Basics of Accounting in Just 1 Hour, Guaranteed!

By continuing above step, you agree to our Terms of Use and Privacy Policy.

* Please provide your correct email id. Login details for this Free course will be emailed to you

WallStreetMojo

Free Investment Banking Course

IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials

By continuing above step, you agree to our Terms of Use and Privacy Policy.

* Please provide your correct email id. Login details for this Free course will be emailed to you

Limited Period Offer - All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) View More