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JAMB Principles of Accounts 2003 Question 14

Question 14

Final Accounts of a Sole Trader

Given:
I. Order of performance
II. Order of liquidity
III. Vertical order
IV. Horizontal order
The orders in which a balance asset is arranged are

  1. A.I and II
  2. B.I and IV
  3. C.II and III
  4. D.III and IV
Show the answer and explanation

Answer: A (I and II)

Explanation

Assets in a balance sheet are listed either in order of permanence (fixed assets first) or in order of liquidity (most liquid first).