Which One of the Following Represents the Most Liquid Asset

question 24

Multiple Choice

Which one of the following represents the most liquid asset?

• A) $100 account receivable that is discounted and collected for $96 today
• B) $100 of inventory that is sold today on credit for $103
• C) $100 of inventory that is discounted and sold for $97 cash today
• D) $100 of inventory that is sold today for $100 cash
• E) $100 of accounts receivable that will be collected in full next week

Analyze the influence of expectancy and value on motivation according to expectancy × value theory.

Grasp the impact of cultural and environmental factors on eating behaviors, achievement needs, and obesity.

Understand the concept of disbursement and collection floats in cash management.

Calculate the daily fees appropriate for eliminating float entirely.

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Definitions:

Revenue

The overall revenue generated from a company's core business activities, through selling products or services.

Discounts Lost

The additional cost a company incurs for not taking advantage of early payment discounts offered by suppliers.

Net Method

An accounting method where discounts for early payment are assumed to be taken and purchase discounts are deducted from the cost of purchases.

Recording Purchases

The process of documenting the acquisition of goods or services in the financial records of an entity, impacting its inventory or expense accounts.