Plant assets are usually listed in order from most liquid at least liquid tour false

Expert Solution

True.

Order of liquidity is the presentation of assets in the balance sheet in the order of the amount of time it would usually take to convert them into cash. Thus, cash is always presented first, followed by marketable securities, then accounts receivable, then inventory, and then fixed assets. Goodwill is listed last.

Concept of Liquidity is present in the balance sheet in asset side, the order of liquidity concept results in a logical sort sequence for the assets listed in the balance sheet.The less liquid items are the last one and the most come the first, in the order of the amount of time it would usually take to convert them into cash. Hence the list of assets starts with cash and ends with the least liquid fixed assets, those that are the hardest to turn into cash. For instance, if you have an item labeled 'good will' on your balance sheet, you'll have to sell the business itself to turn that particular asset into cash."

ekkarill92 answered 2 years ago

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