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Question
Under liquidity order of balance sheet _________ a/c is shown at the last.
Under liquidity order of balance sheet _________ a/c is shown at the last.
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Solution
The correct option is C goodwill
Assets and Liabilities are to be shown in the balance sheet either in permanency order or liquidity order. This is called marshaling of balance sheet.
Liquidity Order- In this order, assets are liabilities are shown as per their liquidity. In such case, cash and bank is the starting point of assets sides and fixed assets are the last. In fixed assets also, Goodwill is considered as the most permanent hence it is shown in the last. It is just reversed of the permanency order.
Assets and Liabilities are to be shown in the balance sheet either in permanency order or liquidity order. This is called marshaling of balance sheet.
Liquidity Order- In this order, assets are liabilities are shown as per their liquidity. In such case, cash and bank is the starting point of assets sides and fixed assets are the last. In fixed assets also, Goodwill is considered as the most permanent hence it is shown in the last. It is just reversed of the permanency order.
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