Assets Are Listed in the Order of Their ________ on the Balance

question 9

Multiple Choice

Assets are listed in the order of their ________ on the balance sheet.

• A) magnitude
• B) dates of purchase
• C) liquidity
• D) durability

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Definitions:

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized or accounted for.

Conservatism

An accounting principle that dictates to recognize expenses and liabilities as soon as possible, but revenues and assets only when they are assured of being received.

Gross Profit Method

A technique used to estimate the amount of inventory a business has by applying the gross margin ratio to the cost of goods sold.

Fireproof Vault

A secure storage unit designed to protect contents from fire, typically used to safeguard valuable documents and items.