Items in M1 Are More Liquid Than Items in M2

question 145

True/False

Items in M1 are more liquid than items in M2.

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Definitions:

Petty Cash

Petty cash is a small amount of cash on hand used for covering minor, incidental expenses within a business.

Journal Entry

A record of a business transaction in the accounting journal that shows the accounts and amounts debited and credited.

Merchandise Inventory

Goods a business has acquired to sell to customers but has not yet sold.

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.