The correct order to present current assets is
A)Cash, accounts receivable, prepaid items, inventories.
B)Cash, accounts receivable, inventories, prepaid items.
C)Cash, inventories, accounts receivable, prepaid items.
D)Cash, inventories, prepaid items, accounts receivable.

Question

Quizplus · Accepted Answer

The correct order to present current assets is in the order of liquidity, or how quickly they can be converted to cash. Cash is the most liquid asset and should be listed first, followed by accounts receivable (which can be converted to cash within a short period of time), inventories (which may take a longer time to sell and convert to cash), and prepaid items (which are typically non-cash assets that have been paid for in advance). Therefore, the correct order is Cash, accounts receivable, inventories, prepaid items.

The Correct Order to Present Current Assets Is