The correct order to present current assets is
A) cash,inventories,prepaid items,accounts receivable.
B) cash,inventories,accounts receivable,prepaid items.
C) cash,accounts receivable,prepaid items,inventories.
D) cash,accounts receivable,inventories,prepaid items.

Question

Quizplus · Accepted Answer

The correct order to present current assets is in the order of liquidity, which means assets that can easily be converted into cash should be presented first. Therefore, cash should be presented first, followed by accounts receivable, as they are usually the next most liquid asset. Then, inventories should be presented, as they take more time to convert into cash. Lastly, prepaid items should be presented. Therefore, the correct order is cash, accounts receivable, inventories, and prepaid items. This order is reflected in choice D.

The Correct Order to Present Current Assets Is