The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010: The current assets should be listed on Dinkel's balance sheet in the following order:
A) cash, accounts receivable, prepaid insurance, equipment.
B) cash, prepaid insurance, supplies, accounts receivable.
C) cash, accounts receivable, prepaid insurance, supplies.
D) equipment, supplies, prepaid insurance, accounts receivable, cash.

Question

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:  The current assets should be listed on Dinkel's balance sheet in the following order:
A) cash, accounts receivable, prepaid insurance, equipment. 
B) cash, prepaid insurance, supplies, accounts receivable. 
C) cash, accounts receivable, prepaid insurance, supplies. 
D) equipment, supplies, prepaid insurance, accounts receivable, cash.

Quizplus · Accepted Answer

The order of current assets on the balance sheet is typically listed in order of liquidity. Cash is the most liquid, followed by accounts receivable, then prepaid expenses, and finally supplies. Therefore, the correct order for Dinkel Company's current assets is cash, accounts receivable, prepaid insurance, and supplies. Option C is the only choice that has this order.

The Following Items Are Taken from the Financial Statements of Dinkel