The following items are taken from the financial statements of Gray's Postal Service for the year ending December 31, 2021: The current assets should be listed on Gray's Postal Service's balance sheet in the following order:

Question

The following items are taken from the financial statements of Gray's Postal Service for the year ending December 31, 2021:  The current assets should be listed on Gray's Postal Service's balance sheet in the following order:

Quizplus · Accepted Answer

Current assets are listed in order of expected liquidity, or how quickly they can be converted into cash. Cash is the most liquid and should be listed first, followed by accounts receivable (which can be collected in the near future), then prepaid insurance (which has already been paid but will provide a benefit in the future), and finally supplies (which will be consumed in operations). Therefore, the correct order is cash, accounts receivable, prepaid insurance, and supplies. Equipment is a non-current asset and should not be included in the order of current assets.

The Following Items Are Taken from the Financial Statements of Gray's