Question

Which of the following approach can be used for marshalling of balance sheet?

• A. Permanence order or according to purpose
• B. Liquidity order or according to time
• C. Either (A) or (B)
• D. None of the above

Answer 1

The correct option is C Either (A) or (B)

There are two orders followed in Marshalling of assets and liabilities.
1. Order of Liquidity- In this, the most liquid assets are placed first and least liquid assets are placed last.
2. Order of Permanence - This is the reverse of order of liquidity.