Current assets listed in the order of liquidity are:
A)accounts receivable,inventory,cash and cash equivalents.
B)cash and cash equivalents,accounts receivable,short-term investments,inventory.
C)cash and cash equivalents,short-term investments,accounts receivable,inventory.
D)marketable securities,cash and cash equivalents,accounts receivable,inventory.

Question

Quizplus · Accepted Answer

This is the correct order of liquidity as cash and cash equivalents and short-term investments can be easily converted to cash, followed by accounts receivable which represents money owed to the company and can be collected relatively quickly, and ending with inventory which may take longer to sell and convert to cash. Option A and D have inventory listed before accounts receivable, which is not in the correct order of liquidity. Option B has short-term investments listed before cash and cash equivalents, which is not the standard order.

Current Assets Listed in the Order of Liquidity Are