Question

In what order would the following assets be listed on a balance sheet?

1) Assets are not listed in any specific order on a balance sheet
2) Assets are listed in order of liquidity on a balance sheet
3) Assets are listed in alphabetical order on a balance sheet
4) Assets are listed in order of their acquisition on a balance sheet

Answer 1

Assets on a balance sheet are typically listed in order of liquidity, with the most liquid assets listed first.

Step-by-step explanation:

On a balance sheet, assets are typically listed in order of liquidity. Liquidity refers to how quickly an asset can be converted into cash without significant loss in value. The most liquid assets, such as cash and cash equivalents, are listed first, followed by assets that are less easily converted into cash, such as accounts receivable and inventory. Finally, non-current assets, such as property, plant, and equipment, are listed last.