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The order in which assets were listed and described in the text is the order in which you will see them listed on the
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Explain the organizing principle behind the listing of assets on the balance sheet.
Explanation of Solution
Asset:
Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue.
The organizing principle behind in the listing of assets on the balance sheet as follows:
At the time of listing of assets on the balance sheet, the assets are prioritized based on the liquidity. The high liquid assets are reported in the beginning of asset section, and then low liquid assets are reported.
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Chapter 2 Solutions
Financial Accounting, Student Value Edition (4th Edition)
- I have a question about the Balance Sheet. Is it true that there are two formats (Account Form and Report Form)?Secondly when listing Assets on the Balance Sheet there is an order to following with assets. Example Current Assets are listed first and in order of liquidity. Then the Long Term Assets. Now where to Tangible and Non Tangible Assets fit into this format?arrow_forwardexplain the purpose of and the information found on the balance sheetarrow_forwardA. What is total current assets on this company's balance sheet? B. What is the correct order for the current assets section of this company's balance sheet? ANSWER IN DETAILarrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
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