Question

Balance sheets prepared under IFRS: Multiple Choice must list assets, but not liabilities in order of liquidity. may list assets and liabilities from least liquid to most liquid. must list liabilities, but not assets, from most to least liquid. must list assets and liabilities from least liquid to most liquid.

Answer 1

Answer:

The correct answer is letter "B": may list assets and liabilities from least liquid to most liquid.

Explanation:

The International Financial Reporting Standard or IFRS is the set of international accounting standards issued by the International Accounting Standards Board (IASB) that establishes the requirements for recognizing, measuring, presenting, and informing economic transactions and events that affect a company and reflect its Financial Statements.

Under the IFRS, assets are usually reported in reverse order of liquidity, meaning the least liquid assets are recorded first but the most liquid asset can be presented at first as well.

Answer 2

Answer:

May list assets and liabilities from least liquid to most liquid.

Explanation:

According to International Financial Reporting Standards IFRS the companies may list their available assets and liabilities in descending order of most liquid to least liquid. It enables the users financial statements to easily assess the time assets will take to be converted into cash. Therefore cash is considered as most liquid and is first item to be presented on the Balance sheet of the company under current assets account.