All of the Following Are Normally Considered Liquid Assets of a Company

question 28

Multiple Choice

All of the following are normally considered liquid assets of a company except?

• A)accounts receivable.
• B)inventory.
• C)notes receivable.
• D)short-term investments.

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Definitions:

Market Interest Rate

The prevailing rate at which interest is offered on deposits or loans in the financial markets for a particular term and risk profile.

Effective Interest Rate

An adjusted interest rate that accurately reflects the cost of borrowing including fees and compounding.

Stated Rate

The annual interest rate declared on a loan or investment, not accounting for compounding or additional fees.

Effective Interest Method

A method used in accounting to allocate the interest income or expense over the relevant period, adjusting for the impact of discount or premium on the purchase of bonds.