AP2 - Statement of Financial Position - Current Assets

imtiaz

The Kaplan book states that current assets in the SOFP should be listed in order as:
Inventory
Recievables
Prepayments
Cash (Bank)
Cash in Hand

Just completed the first practice CBT for AP2 on AAT website. Last question is to basically complete a SOFP. I noticed in the answer Cash was listed before Prepayments.
Order in answer being:
Inventory
Trade recievables
Cash
Prepayments

If anyone has some light to shed on which is actually correct please let me know.

angmc

I recently asked my tutor the exact same question, what he said was with regards to prepayments they're not really included in the order of liquidity as they are an accounting provision so they can be placed at the beginning or the end and as for bank/cash they are classed as equal and are sometimes amalgamated anyway.

crispy

Hello,

You probably already know this, but as a general rule list the current assets in order of liquidity - inventory being the least liquid down do cash at bank / in hand being most liquid.

imtiaz

angmc

Appreciate the answer, thank you.

vancey

I took my APII exam yesterday. I just filled out the assets in the order that they were listed on the trial balance given (ie alphabetically), and I got 'exceeded' on every topic area in my results breakdown. So don't worry too much.

Jules18

Strictly speaking the Kaplan layout follows the traditional order of current assets although the AAT CBA does not penalise you if you change the order in the exam.