Liquidity Is

question 59

Multiple Choice

Liquidity is:

• A)having assets that can be readily converted into cash.
• B)having liabilities that can be readily converted into cash.
• C)sufficient assets to cover long-run liabilities.
• D)sufficient liabilities to cover long-run assets.

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Definitions:

Assets

Resources owned or controlled by a company, which are expected to provide future economic benefits.

Liabilities

financial obligations or debts that a business needs to settle in the future, such as loans, accounts payable, and mortgages.

Withdrawals

Amounts taken from a business by the owner for personal use.

Assets

Resources owned by a business or individual with economic value or expected to provide future benefits.