Which of the following method of ordering is normally used to present current liabilities on the statement of financial position?
A) In alphabetical order
B) In order of their magnitude
C) In order of their liquidity (due date)
D) In order of reverse liquidity

Question

Quizplus · Accepted Answer

Current liabilities are usually ordered by their due date or liquidity, with the most urgent or closest to maturity being listed first. This helps readers assess the company's ability to pay its short-term obligations and manage its cash flow effectively. Alphabetical order (A) and reverse liquidity (D) would not provide this useful information, while ordering by magnitude (B) could make it harder to identify which liabilities are most pressing.

Which of the Following Method of Ordering Is Normally Used