Petra, Inc., has $400,000 as current assets, $1.225 million as plant and equipment, and $250,000 as goodwill. In preparing the balance sheet, these assets should be listed in which of the following orders?

Question

Quizplus · Accepted Answer

The assets should be listed in order of liquidity, which means that current assets should be listed first, followed by plant and equipment. Goodwill is listed separately under intangible assets and should be listed after plant and equipment. Therefore, the assets should be listed as current assets, plant and equipment, and then goodwill. Option A lists goodwill before plant and equipment, which is incorrect. Option C is incorrect as goodwill is an asset and should be listed under intangible assets. Option D is incorrect as the correct answer is B.