Question

In which order should the components of a balance sheet be reported?

O A. liabilities, owner's equity, assets
B. assets, owner's equity, liabilities
C. owner's equity, liabilities, assets
D. assets, liabilities, owner's equity

Answer 1

D. assets, liabilities, owner's equity

Step-by-step explanation:

The balance sheet is prepared following the order of the accounting equation; assets are equal to liabilities plus equity. It means assets will come first, followed by liabilities. Owners' equity will be last.

Assets and liabilities are listed in the order of their liquidity. Current assets will be on top on the assets side, while current liabilities will top liabilities side.