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Which of the following is not part of the balance sheet?

A. Net earnings
B. Deferred assets
C. Long term liabilities
D. Plant, property and equipment

1 Answer

3 votes

Final answer:

Net earnings is not part of the balance sheet, while deferred assets, long-term liabilities, and plant, property and equipment are all part of the balance sheet.The correct option is A.

Step-by-step explanation:

The balance sheet is an important financial statement that lists a company's assets and liabilities. Net earnings or net income, also known as the bottom line, represents the company's profit or loss for a specific period of time and is reported in the income statement, not the balance sheet. So, net earnings is not part of the balance sheet. However, it is used to calculate the changes in the owner's equity, which is reported in the balance sheet.

On the other hand, deferred assets and long-term liabilities are both part of the balance sheet. Deferred assets include prepaid expenses, such as prepaid insurance or rent, which are reported as assets because they represent future benefits. Long-term liabilities, such as long-term loans or bonds payable, represent the company's obligations that are due beyond one year.

Lastly, plant, property and equipment is also part of the balance sheet. These are tangible assets that a company uses in its operations, such as buildings, land, and machinery.

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