Assets Are Listed on the Balance Sheet in Order of Liquidity.Which

question 156

Multiple Choice

Assets are listed on the balance sheet in order of liquidity.Which of the following items reflects the normal order of liquidity?

• A) Cash, Inventory, Notes receivable, Accounts receivable
• B) Notes Receivable, Inventory, Accounts receivable, Cash
• C) Cash, Accounts receivable, Inventory, Notes receivable
• D) Plant assets, Inventory, Notes receivable, Cash

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Definitions:

Trading Securities Portfolio

A collection of marketable securities that a business holds for the purpose of reselling them in the short term to profit from market price changes.

Fair Value

An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Trading Portfolio

A collection of financial assets such as stocks, bonds, commodities, currencies, and derivatives held by an investor, primarily for the purpose of short-term speculation.