Question

Under permanence order of balance sheet _________ a/c is shown at the last.

• A. cash in hand
• B. cash in bank
• C. FD with bank
• D. goodwill

Answer 1

Answer: (A)

cash in hand

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.

Order of permanency is that where the assets and liabilities are shown as per their permanency in the business. For example, in assets side, fixed assets are show first staring from Goodwill, Land & Building, Plant & Machinery , Furniture and Fixtures and then current assets. In current assets also, cash in hand is the most liquid asset hence to be shown in the last.