Module 22.1 & 22.2 Balance Sheet, Assets, and Liabilities Introduction

Question 1

What is liquidity vs. solvency?

Answer 1

liquidity - ability to meet short term needs

solvency - is the ability to meet long-term obligations

Question 2

what is a classified balance sheet? can firms use it under IFRS and GAAP?

Answer 2

shows assets and liabilities as current / non-current

Yes

Question 3

What is the liquidity based format? can firms use it under IFRS and GAAP?

Answer 3

present assets and liabilities in the order of liquidity.

Under IFRS, not GAAP.