Question

Ahrens Inc is preparing its January balance sheet. Ahrens has $3,100 in Supplies to be converted in March, $4,700 Notes Receivable to be converted in August, $800 in Prepaid Insurance to be converted in April, and $6,200 in Accounts Receivable to be converted in June. In what order should Ahrens list these assets?

Answer 1

Assets should be listed down based on its liquidity. The more liquid it is, the higher its place in the balance sheet.

$3,100 in Supplies to be converted in March,
$4,700 Notes Receivable to be converted in August,
$800 in Prepaid Insurance to be converted in April, and
$6,200 in Accounts Receivable to be converted in June

The assets should be listed in this order:
Supplies $3,100
Prepaid Insurance $800
Accounts Receivable $6,200
Notes Receivable $4,700