What is Grouping and Marshalling?

Grouping and Marshalling


In accounting, Grouping refers to presenting similar items with similar qualities together. They are shown under a common head inside financial statements. For example, let’s say a company has 200 different creditors that it deals with. All of them will not be shown separately in financial statements, only the net total of all the creditors will be presented.

Another example would be of Stock which shows the net total of (Raw Material + Work In Progress + Finished Stock).

Related Topic – What is a Cost Center?


The arrangement of assets and liabilities on the balance sheet in proper order is called Marshalling. The assets, liabilities, and capital on a balance sheet must be properly marshalled and shown in a logical order. There are 2 common ways of Marshalling:

  • By Liquidity

Assets are arranged in order of liquidity i.e. they can be converted to cash easily. Most liquid assets, such as cash, will come first and least liquid assets, such as building, will come last. Liabilities are arranged in the order they are to be discharged.

Sample Format of a Balance Sheet in Order of Liquidity

Liabilities AmtAssetsAmt
Bills PayablexxxxCashxxxx
CreditorsxxxxBank xxxx
LoansxxxxGovt. Securitiesxxxx
Outstanding ExpensesxxxxOther Investmentsxxxx
Reserves & SurplusxxxxBills Receivablexxxx
  Plant & Machineryxxxx


  • By  Permanence

Assets are arranged in order of permanency i.e. with the most permanent on the top and the most liquid on the bottom. Liabilities which have to be discharged last are shown first and those which have to be discharged first are shown last.

Sample Format of a Balance Sheet in Order of Permanence

Reserves & SurplusxxxxPlant & Machineryxxxx
Outstanding ExpensesxxxxFurniturexxxx
Bills PayablexxxxBills Receivablexxxx
  Other Investmentsxxxx
  Govt. Securitiesxxxx
  Bank xxxx


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