With Regard to Liabilities, Liquidity Refers to

question 73

Multiple Choice

With regard to liabilities, liquidity refers to

• A)a company's ability to convert its assets to cash to pay its liabilities
• B)a company's ability to use its financial resources to adapt to change
• C)a company's operating cycle
• D)only liabilities and not assets

---

Definitions:

Double-Entry Bookkeeping System

An accounting principle where each financial transaction is recorded in two accounts, ensuring the books are always balanced.

Single-Entry System

An accounting method where each financial transaction is recorded only once, either as an income or an expense.

Business Operating Expenses

Costs associated with the day-to-day functions of running a business, excluding the cost of goods sold.

Suppliers

Entities that provide goods or services to another organization or individual.