Highly Liquid Assets

question 62

Multiple Choice

Highly liquid assets:

• A)increase the probability a firm will face financial distress.
• B)appear on the right side of a balance sheet.
• C)generally produce a high rate of return.
• D)can be sold quickly at close to full value.
• E)include all intangible assets.

Recognize the advantages of different business structures like corporations and partnerships.

Identify the objective of the balance sheet and understand financial statements' roles.

Know the balance sheet equation and how it represents the financial position of a company.

Understand how financial statements, specifically cash flow statements and income statements, help assess a company's financial health.

---

Definitions:

Additional Investments

Extra funds put into a business by its owners or shareholders, beyond the initial investment, to support operations, growth, or expansion.

Net Income

The total earnings of a company after subtracting all expenses from revenue, including taxes and operating expenses.

Capital Deficiency

A situation where a company's total capital is less than its total liabilities, indicating financial distress.

Voluntary Act

An action undertaken by an individual or entity out of free will without coercive influences.