In: Accounting
what order should assets appear on the balance sheet?
Solution: | ||||
In order of liquidity assets should appeared on the balance sheet | ||||
Liquidity means how easily they can be converted into cash, like cash do not need to convert, then the marketable securities and so on. | ||||
Assets order on the balance sheet in the order of liquidity are: | ||||
1st | Cash | |||
2nd | Marketable securities | |||
3rd | Accounts receivable | |||
4th | Inventory. | |||
5th | Fixed assets | |||
6th | Goodwill or intangible assets | |||
In other words , assets on balance sheet are in order of current assets , investment, fixed assets at last intangibles, and in current assets , assets are in the order of how fast they can be converted into cash. | ||||