According to the Keown Book,an Emergency Fund Consists of Liquid

question 16

Multiple Choice

According to the Keown book,an emergency fund consists of liquid assets that are sufficient to cover ________ of expenditures.

• A)1 to 2 months
• B)3 to 6 months
• C)9 to 12 months
• D)18 to 36 months

---

Definitions:

Insurance

A financial product that provides protection against losses or damages, in exchange for premium payments to the insurer.

Direct Method

A cash flow statement preparation approach that shows actual cash receipts and payments, as opposed to the indirect method.

Balance Sheet

A document presenting a firm's assets, liabilities, and owner's equity at a certain date.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered or used but not yet paid for.