Arrange the following in the correct order on a balance sheet: liabilities, assets, equity.
Understand the Problem
The question is asking for the correct order of items that typically appear on a balance sheet, which are liabilities, assets, and equity. The standard order on a balance sheet is to list assets first, followed by liabilities, and then equity.
Answer
Assets, liabilities, equity.
The correct order of arrangement on a balance sheet is assets, liabilities, then equity.
Answer for screen readers
The correct order of arrangement on a balance sheet is assets, liabilities, then equity.
More Information
A balance sheet typically lists assets first followed by liabilities and equity, as part of the accounting equation: Assets = Liabilities + Equity. This arrangement helps in understanding the financial position of a company.
Tips
A common mistake is not aligning the balance sheet totals so that assets equal the sum of liabilities and equity. This equation is crucial for accurate financial reporting.
Sources
- How to Prepare a Balance Sheet: 5 Steps - HBS Online - online.hbs.edu
- How Do You Read a Balance Sheet? - Investopedia - investopedia.com
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