How Do You Classify Assets & Liabilities?
Tracking your assets and liabilities is one of the most important business management skills to develop. The first step in tracking these things is to classify your assets and liabilities according to how they are used. Classify your assets into a major category based on what the asset is used for. For example, most balance sheets will classify assets as current, long term, property, investments, other or intangible. Break down your assets into sub-classifications based on specific uses of the asset. For example, under current assets you may have cash, temporary investments and inventory, while under property assets you may have land and real estate assets listed. Identify the main classifications for your liabilities. Balance sheets will usually classify liabilities as either current or long term. Create sub-classifications for your liabilities. For example, under current liabilities you may have sub-classifications like notes payable and accounts payable, while you will have notes pa
