Mollypod88 wrote: » Sorry I'm having a really stupid day today :huh: What does order of liquidity mean?
Yazi wrote: » I remember Assets like this : Sit Down Pretty Black Cat..... Stock = Sit SLCA = Down (Debtors) Prepayments = Pretty Bank = Black Cash = Cat
SarahJS wrote: » I'm not 100% sure, but for the exams I don't think it matters (obviously best practice for real life though!). I'm sure I even saw balance c/d not at the end of the account in the solutions for an AP2 question (a find the missing balance one).
Comments
Assets:
Start with the least downwards
Stock
SLCA
Prepayments
Bank
Cash
Liabilities
PLCA
Bank (overdraft)
Accrual
VAT
This is the usual order :001_smile:
What does order of liquidity mean?
How "LIQUID" they are (how much money they have) ... when one goes Into Liquidation it is because they have no money.
Stock = Sit
SLCA = Down (Debtors)
Prepayments = Pretty
Bank = Black
Cash = Cat
I'm sure I even saw balance c/d not at the end of the account in the solutions for an AP2 question (a find the missing balance one).
It matters, trust me - you may collect points for getting the correct answer, but you can also lose them for a failure in method.
AFAIK, there are three areas of marking, I may be wrong