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Question

In what order, the following assets are shown in the balance sheet of a company?
i) Trade receivables
ii) Cash
iii) Furniture and fittings
iv) Investment in shares and debentures

A
(ii), (i), (iv), (iii)
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B
(i), (ii), (iii), (iv)
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C
(iii), (iv), (i), (ii)
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D
(iv), (iii), (ii), (i)
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Solution

The correct option is A (iii), (iv), (i), (ii)
Assets are to be shown in the balance sheet in an order. There are two ways of showing the items of assets & liabilities i.e. Order of permanency and order of liquidity. This is also called as marshaling of balance sheet.
Accordingly , items to be shown as :

Furniture & Fittings
Investment in shares & debentures
Trade receivables
Cash

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