In a classified balance sheet, buildings owned and used in operations are most appropriately reported as which classification?

• A. Current liabilities
• B. Property, plant, and equipment (long-term assets)
• C. Current assets
• D. Intangible assets

Answer: (B)

Verified step by step guidance

1. Understand the purpose of a classified balance sheet, which organizes assets and liabilities into meaningful categories to provide clear financial information.
2. Recall that assets on a balance sheet are generally classified as current assets or long-term assets based on their liquidity and usage.
3. Recognize that buildings owned and used in operations are physical, long-term assets that provide value over multiple accounting periods.
4. Identify that such assets are typically reported under the category called 'Property, plant, and equipment,' which includes tangible fixed assets used in business operations.
5. Conclude that buildings should not be classified as current assets, current liabilities, or intangible assets, but rather as property, plant, and equipment (long-term assets) on the classified balance sheet.