The following current assets are listed in a companys general ledger. The accountant wants to place the
Question:
The following current assets 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.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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In order of liquidity on the balance sheet 1 Petty Cash Fund 2 M...View the full answer
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Related Book For 
Financial Accounting The Impact on Decision Makers
ISBN: 978-1285182964
9th edition
Authors: Gary A. Porter, Curtis L. Norton
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