On the balance sheet, liabilities are presented in order of maturity.

• A. In Order of Maturity
• B. Alphabetically
• C. By Amount
• D. By Department

Answer: (A)

The main idea is that the balance sheet organizes liabilities by when they must be settled, not by name, size, or department. Liabilities are shown as current (due within a year) first, then long-term obligations, and within the current portion they’re arranged roughly by the due dates so the most imminent obligations appear first. This ordering highlights liquidity—how soon cash outflows are coming. Sorting alphabetically, by amount, or by department wouldn’t provide that timing information, so they wouldn’t be as helpful for assessing when cash is needed.