Which of the following items is reported on a classified balance sheet (rather than on the income statement or statement of cash flows)?

• A. Depreciation expense
• B. Service revenue
• C. Accounts payable
• D. Net cash provided by operating activities

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the purpose of a classified balance sheet. It organizes assets and liabilities into current and long-term categories, providing a clear picture of a company's financial position at a specific point in time.
2. Step 2: Identify the nature of each item listed: Depreciation expense and Service revenue are components of the income statement, reflecting expenses and revenues over a period. Net cash provided by operating activities is reported on the statement of cash flows, showing cash inflows and outflows.
3. Step 3: Recognize that Accounts payable is a liability representing amounts owed to suppliers or creditors, which is a balance sheet item.
4. Step 4: Since Accounts payable is a current liability, it is reported on the classified balance sheet under current liabilities.
5. Step 5: Conclude that among the options, only Accounts payable appears on the classified balance sheet, while the others belong to different financial statements.