Let’s examine the balance sheet classifications in more detail by looking at
Apple’s balance sheet shown in Exhibit 1-7. With regard to the heading of the financial
statement, several items are of interest. First, the company for which the accounting
information is collected and reported is clearly defined. Second, the title of the
financial statement follows the name of the company. Third, the specific date of the
statement is listed. Apple operates on a fiscal year that ends in September. A fiscal
year is an accounting period that runs for one year. While many companies adopt a
fiscal year that corresponds to the calendar year, others adopt a fiscal year that more
closely corresponds with their business cycle. Finally, Apple reports its financial results
rounded to the nearest millions of dollars. Large companies often round the amounts
presented to make for a more clear presentation. For Apple, the reported cash
amount of $9,352 is actually $9,352,000,000.