The usual order for the asset section of a classified balance sheet is:
A)Current assets, prepaid expenses, long-term investments, intangible assets.
B)Long-term investments, current assets, plant assets, intangible assets.
C)Current assets, long-term investments, plant assets, intangible assets.
D)Intangible assets, current assets, long-term investments, plant assets.
E)Plant assets, intangible assets, long-term investments, current assets.

Question

Quizplus · Accepted Answer

The usual order for the asset section of a classified balance sheet is current assets first, because these are short-term assets expected to be converted into cash within a year or less. Next come long-term investments, because these are assets that a company intends to hold for more than a year. After that come plant assets, which are tangible assets with a useful life of more than a year, and then intangible assets, which have no physical substance but represent long-term economic value. Therefore, the correct order is current assets, long-term investments, plant assets, intangible assets.

The Usual Order for the Asset Section of a Classified