What is the Order of liquidity on a balance sheet?

The order of liquidity for assets on a balance sheet is the order in which assets are listed from the most liquid asset to the least liquid asset. The order is important because it reflects which assets you are going to use in order to pay liabilities. Current assets are always at the top of the list.

Which current asset accounts are most liquid?

Let’s look at these current asset accounts below, presented in order of liquidity: Cash and cash equivalents: Cash is cash and will always be the most liquid account in current assets. This is because the cash sitting in a bank account can be accessed whenever needed. A company might even have cash on hand.

How are liquid assets reported on a balance sheet?

Similar to other assets, liquid assets are reported on the balance sheet of a company. Assets are listed on the balance sheet in order of liquidity, with the most liquid types listed at the top of the balance sheet and the least liquid listed at the bottom.