Final Accounts Prep query

FH2

Hi,

Just a quick query regarding the final accounts prep exam, we were told by our tutor that the final accounts statements and profit and loss statements we need to put the assets and liabilities in a specific order otherwise we will fail our exam, he said that we need to put in this order which means we will pass;

inventory
accounts receivable
bank
cash

rather than this way in which we will fail;

accounts receivable
cash
inventory
bank

I just wanted to check whether this is the case as my exam is soon

Thanks for you help

nickyowl

Yes, it's least liquid to most liquid - so easiest to turn into cash at the bottom (ie Cash). Think of it as next one down from the fixed assets at the top, so inventory next, then down to cash at the bottom.
You won't fail but you won't pick up the mark(s) for getting the order right.
Good luck in your exam.
Nicky

JC101

Hi Nicky,

I'm studying this at the moment so thank you for your reply to FH2's question. I don't suppose you know if the liabilities have to be listed in a certain order too?

Many thanks.

nickyowl

We were told no particular order for liabilities

Nicky

JC101

Many thanks Nicky.

FH2

Thanks for your help, had my exam on Thursday and I passed

nickyowl

Brilliant! Well done