Question

25.
The asset which is most easily convertible into cash is shown first and the
liability which is to be paid at the earliest will be shown last in order of liquidity. 1
(True/False)​

Answer 1

Answer:

The asset which is most easily convertible into cash is shown first and the

liability which is to be paid at the earliest will be shown last in order of liquidity. 1

(True/False) ok nahi pata tere ko

Answer 2

The statement is True.

• Generally, the assets are listed in terms of their liquidity.
• This ensures that the assets that are easiest to turn into cash are classified first, followed by the liabilities that are due to be resolved soonest.
• The order in the balance sheet is the order where assets are presented in relation to the time it will take to turn them into cash. As a consequence, cash generally viewed first.