Cash and Liquid Assets on the Balance Sheet The following accounts are listed in a company’s general ledger. The accountant wants to place the items in order of liquidity on the balance sheet.

Accounts receivable Certificates of deposit (six months)

Investment in stock Prepaid rent Money market fund Petty cash fund Required Rank the accounts in terms of liquidity. Identify items to be included in the total of cash and explain why the items not included in cash on the balance sheet are not as liquid as cash. Explain how these items should be classified.