A Highly Liquid Asset

question 260

Multiple Choice

A highly liquid asset

• A) can be converted into a means of payment easily without loss of value.
• B) is highly leveraged.
• C) generally has a very limited market for its resale.
• D) has high transaction costs associated with its sale.

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Definitions:

Value-Added Costs

Expenses incurred by a company that increase the worth of a product or service to a customer, thereby enhancing the product's or service's selling price.

Non-Value-Added Costs

Expenses that do not contribute to adding value or increasing the worth of a product or service from a customer's perspective.

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished goods.

Machine Hours

A measure of production output or activity based on the number of hours machinery is in operation, used in cost accounting to allocate expenses to products.