Ans. ‘Marshalling of Assets and Liabilities’ means arranging the assets and liabilities of the firm
in a specific sequence.
Assets may be recorded on the basis of liquidity, speed of conversion of assets into cash.
Liquid assets first and non-liquid assets, later, are shown on the assets side of the balance
sheet. In a similar manner, capital is recorded first and other liabilities later. There is no
standard format of the balance sheet for a proprietary concern and partnership firm, unlike
a limited company.
