The Ease with Which an Asset Can Be Converted into Cash

question 59

Multiple Choice

The ease with which an asset can be converted into cash is termed

• A)financial flexibility
• B)liquidity
• C)operating capability
• D)capital maintenance

---

Definitions:

Liquidated Debt

A debt with a known, fixed amount that is not disputed by either party.

Unliquidated Debt

A debt for which the exact monetary value has not been determined.

Preexisting Duty

An obligation that a party is already legally bound to fulfill, which cannot serve as consideration for a new contract.

Accord and Satisfaction

A legal settlement where an agreement is made to discharge a claim by providing some form of compensation that differs from the original obligation.