Answer (D) is correct . Assets presented on the balance sheet are listed in descending order of liquidity, which allows users of financial statements to identify the assets that will be available first to meet current liabilities. An asset that is readily convertible to cash is considered very liquid. Accounts receivable typically has more liquidity than inventory and therefore is listed above inventory in the current assets section of the balance sheet.
Answer (A) is incorrect because Goodwill is an intangible asset and is classified in the long-term assets section of the balance sheet.
Answer (B) is incorrect because Land is included in property, plant, and equipment and is not readily convertible to cash.
Answer (C) is incorrect because Inventory takes longer to convert to cash than accounts receivable.
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