Because Cash Is the Least Liquid Current Asset It Is

question 158

True/False

Because cash is the least liquid current asset it is listed last in the current assets section of the statement of financial position.

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Definitions:

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Current Liabilities

Obligations a company must pay within a year, including accounts payable, short-term loans, and accrued expenses.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle, whichever is longer.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not yet compensated for.