Arrange the following current assets, in descending order of liquidity.

(A) Cash in hand

(B) Bills receivable

(C) Marketable securities

(D) Finished goods inventory

Choose the correct answer from the options given below:

Option 1 -> Places bills receivable before marketable securities, but marketable securities are more liquid as they can be sold quickly in the market.

Option 2 -> Correctly arranges: Cash (most liquid) → Marketable securities (easily tradable) → Bills receivable (awaits maturity) → Finished goods (needs sale and collection).

Option 3 -> Incorrectly places bills receivable as most liquid and cash as second, which contradicts the basic liquidity principle.

Option 4 -> Incorrectly places marketable securities as most liquid and cash as least liquid, completely reversing the liquidity order.

Hence, Option 2: (A), (C), (B), (D) -> Cash in hand is most liquid (already in cash form), followed by marketable securities (quickly convertible through market sale), then bills receivable (requires maturity period or discounting), and finally finished goods inventory (requires sale and payment collection, making it least liquid) -> correct