Asked by Tommy Grias on Apr 24, 2024
Verified
Under U.S.GAAP,current assets are generally listed on the balance sheet in descending order of liquidity.
Descending Order of Liquidity
Ranking assets on a balance sheet from the most liquid (easily converted into cash) to the least liquid.
- Familiarize oneself with the differences in reporting protocols and techniques under U.S. GAAP and IFRS, with an emphasis on liquidity measures and the sequencing of balance sheet items.
Verified Answer
JG
Jeron GallimoreMay 02, 2024
Final Answer :
True
Explanation :
Under U.S. GAAP, current assets are generally listed on the balance sheet in descending order of liquidity, meaning the assets that are most easily converted to cash are listed first. This allows investors and creditors to see how quickly a company can access cash to pay its debts and fulfill its obligations.
Learning Objectives
- Familiarize oneself with the differences in reporting protocols and techniques under U.S. GAAP and IFRS, with an emphasis on liquidity measures and the sequencing of balance sheet items.
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