On a classified balance sheet, how are liabilities typically listed (presented)?

• A. In order of maturity, with long-term liabilities presented before current liabilities
• B. In order of maturity, with current liabilities presented before long-term liabilities
• C. In descending order of dollar amount, with the largest liability presented first
• D. In alphabetical order by liability account title, regardless of due date

Answer: (B)

Verified step by step guidance

1. Understand that a classified balance sheet organizes liabilities into categories based on their due dates or maturity.
2. Recognize that current liabilities are obligations expected to be settled within one year or the operating cycle, whichever is longer.
3. Know that long-term liabilities are obligations not due within the next year or operating cycle.
4. On the balance sheet, liabilities are typically listed in order of maturity, starting with current liabilities (short-term) followed by long-term liabilities.
5. This presentation helps users of financial statements quickly assess the company's short-term obligations before considering its long-term debts.