Which statement is TRUE about the balance sheet?

The statement that assets are presented in order of liquidity is true regarding the balance sheet. In a balance sheet, assets are arranged based on how quickly they can be converted into cash, with the most liquid assets (such as cash and cash equivalents) listed first, followed by less liquid assets like accounts receivable and inventory, eventually leading to fixed assets like property and equipment.

This order of liquidity provides valuable insights to users of the financial statement about the immediate availability of resources that the company can use to meet its short-term obligations. The focus on liquidity is essential for assessing the company's short-term financial health and capability to manage its liabilities.

Other statements are not correct for distinct reasons: balance sheets do not include revenues and expenses, as they are represented in the income statement; they reflect a specific point in time rather than performance over a period; and the balance sheet is indeed a vital financial statement, crucial for understanding an organization's financial position, not an entity that lacks its classification.