Current Assets May Be Listed in the Balance Sheet in the Order

question 11

Multiple Choice

Current assets may be listed in the balance sheet in the order of their liquidity.Liquidity is:

• A)Another name for the operating cycle
• B)A measure of how many buyers there are for the asset
• C)Whether the asset is secured over a liability
• D)The average length of time it takes to convert an asset into cash

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Definitions:

Depreciation Expense

The allocated portion of the cost of a tangible fixed asset that is charged as an expense in a reporting period, reflecting the usage and wear and tear of the asset.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been expensed to depreciation over the asset's useful life, reflecting how much of the asset's value has been used up.

Consolidation Worksheet

A tool used in preparing consolidated financial statements, allowing a company to adjust and eliminate the transactions among its controlled entities.

Plant

In terms of fixed assets, it refers to the buildings, machinery, equipment, and property used in the operations of a business.