The Ease with Which an Asset Can Be Converted into Cash

question 59

Multiple Choice

The ease with which an asset can be converted into cash is termed

• A)financial flexibility
• B)liquidity
• C)operating capability
• D)capital maintenance

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Definitions:

Losses Of Inventory

The reduction in the value of goods held for sale, due to theft, deterioration, or obsolescence.

Actual Inventory

The physical count and valuation of all goods available for sale or use at a specific time, often conducted through a physical inventory audit.

Trade Discount

A reduction in the list price granted by a supplier to a buyer from the trading sector, based on the volume of goods purchased or as a promotional strategy.

Government Agencies

Official organizations established by a government to perform specific functions or services in accordance with legal mandates.