The article focuses on balance-sheet form and classification in corporate reports. According to writers of accounting theory, there are two generally accepted forms for the presentation of the balance sheet, the account form and the report form. The account form presents the two sides as in a ledger account, with the assets on the left and the liabilities and net worth on the right side. The report form presents the liabilities and net worth immediately below the assets, in a narrative form. The account form is probably the more convenient of the two because, when it is properly set up, it brings into their proper relationships those sections of a balance sheet which are compared, such as current assets with current liabilities and fixed assets with fixed liabilities. There is little choice between the account and report forms of balance sheet set-up, if proper classification and sequence are observed, both forms then yielding exactly the same information. The length of the balance sheet, however, is a factor in the decision as to form, for it seems to be the accepted principle that it should all appear on one page, or two opposite pages, so that one has the entire statement before him.

The article focuses on the classification of individual items in the balance sheet and the relevant terminology's used. The study reported in this article is based on the analysis of 587 balance sheets contained in the annual reports to stockholders of all the industrial companies having common or preferred stocks listed in the New York stock exchange. Some of the terms being discussed are—inventories, tangible fixed assets, intangible fixed assets, etc. In 390 out of 570 statements having inventories, no classification of content of inventories was shown. A single amount was being used for all the inventories. All the tangible fixed assets were combined in one amount in 323 statements. In the remaining balance sheets, where the tangible fixed assets were broken down into two or more items, there were 131 instances where the values of land and buildings were combined, making a total of 454 statements in which the value of the land was included with other values. This represents 78.5% of the balance sheets in which land was mentioned as one of the assets.