Question

Assets and liabilities in the ______ can be arranged either in order of liquidity or in order of permanence.

Options

• Trading Account

• Profit and loss account

• Balance sheet

• Manufacturing account

Answer 1

Assets and liabilities in the Balance sheet can be arranged either in order of liquidity or in order of permanence. 

Explanation:

1. A Balance Sheet is prepared to show a business's financial position. Therefore, its assets and liabilities should be arranged in a systematic manner. 
2. Assets and liabilities can be arranged in the Balance Sheet in two ways Liquidity and Permanence.