Assets are listed on the balance sheet in order of:
I. Decreasing liquidity
II. Decreasing size
III. Increasing size
IV. Relative life
A) I only
B) III and IV only
C) II only
D) IV only

Question

Quizplus · Accepted Answer

Assets are generally listed on the balance sheet in order of decreasing liquidity, which means assets that can be easily converted to cash are listed first, followed by those that may take some time to convert into cash. This arrangement helps investors and creditors determine the company's short-term liquidity position. Size and life of the assets are not usually considered when arranging the order of assets on the balance sheet.

Assets Are Listed on the Balance Sheet in Order Of