Assets are listed on the
Learning Objective 1 |
- purchase date.
- adjustments.
- liquidity.
- balance.
Assets in Balance Sheet
A balance sheet is a list of assets and liabilities as on a given date of an entity. It consists of several assets and liabilities, grouped and presented together to ensure consistency and aid stakeholders.
Assets and Liabilities are listed in order of their liquidity. The most liquid assets are displayed first followed by current assets and finally fixed assets.
To explain:
The basis on which assets are displayed in the balance sheet.
Answer to Problem 1QC
Solution:
The correct answer is Option C.
Explanation of Solution
- In a balance sheet, assets are listed in the order of their liquidity. Liquidity means the ability of an asset to convert into cash.
- The most liquid assets are displayed first followed by current assets and finally fixed assets.
- Current assets are assets convertible to cash within a period of one year. Examples include accounts receivable, inventory, etc.
- Fixed assets are assets that have a longer life and duration of greater than one year. Examples include Property, Plant and Equipment.
- An example of the balance sheet with the assets displayed in order of their liquidity is given below for understanding purposes.
Hence, it can be seen that the assets are listed in the balance sheet in the order of their liquidity.
Want to see more full solutions like this?
Chapter 4 Solutions
Horngren's Accounting (11th Edition)
Additional Business Textbook Solutions
Business Essentials (12th Edition) (What's New in Intro to Business)
Financial Accounting, Student Value Edition (5th Edition)
Macroeconomics
Engineering Economy (17th Edition)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
- Please provide solution these financial Accounting Questionarrow_forwardCalifornia Industries, Inc. borrowed $300,000 at 12% interest on January 1, 2025, for the construction of their new headguarters. Construction began on January 1, 2025, and concluded on December 31, 2025. In addition to the construction loan, California Industries provided the following data: Expenditures: June 1 $500,000 (7 months: 0.58) July 1 $500,000 (6 months: 0.50) December 1 $1,000,000 (1 month: 0.08) Other Debt: 10-year, 13% Bond for $4,000,000, dated December 31, 2018 6-year, 10% Note for $1,600,000, dated December 31, 2022 WHAT IS THE WEIGHTED AVERAGE EXPENSES? $540,000 $80,000 $620,000 $250,000arrow_forwardNon-cash related transactions ARE required to be disclosed on the face of the financials and/or in the footnotes to those statements. Which financial statement shows the non-cash transactions and/or directs financial statement users to see the related footnote for additional details? Income Statement Balance Sheet Statement of Cash Flows Statement of Retained Earningsarrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,