Which of the following items does NOT appear on a classified balance sheet?

• A. Accounts payable
• B. Retained earnings
• C. Inventory
• D. Net sales revenue

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the structure of a classified balance sheet. It organizes assets, liabilities, and equity into specific categories such as current assets, long-term assets, current liabilities, long-term liabilities, and shareholders' equity.
2. Step 2: Identify typical items that appear on a classified balance sheet. For example, 'Accounts payable' is a current liability, 'Retained earnings' is part of shareholders' equity, and 'Inventory' is a current asset.
3. Step 3: Recognize that 'Net sales revenue' is an income statement item, not a balance sheet item. It represents the total sales minus returns, allowances, and discounts during a period.
4. Step 4: Conclude that since 'Net sales revenue' relates to revenues and not to assets, liabilities, or equity, it does NOT appear on a classified balance sheet.
5. Step 5: Summarize that the classified balance sheet focuses on financial position at a point in time, while net sales revenue is part of the performance over a period, thus it belongs to the income statement.