Question

Current assets are usually listed in order A. of the due dateB. of the sizeC. alphabeticallyD. of liquidity

Answer 1

Answer:

D. of liquidity

Explanation:

The current assets will be listed according to how close are to be converted to cash. and liquidity is the property of an asset to be converted into cash. the land  have less liquidity than  an account recievable, as the land required a lot of effort an time to be sold, while the account receivable is a know price with a certain colection date.

With the liquidity in mind, the current assets should be listed as follow:

first we list cash, nothing is more liquid than cash.

then we list cash equivalent like marketable securities

the nwe list account receivable

and inventory

why  the account receivable have more liquid than inventory?

because the account receivable needthe effort to be colelcted.

while the inventory needs both, the effort to sale the goods and then collected.