When an Asset Is Described as Being Highly Liquid, Which

question 394

Multiple Choice

When an asset is described as being highly liquid, which one of the following characteristics does it possess?

• A) It earns a high rate of interest, so its purchasing power is maintained when prices rise.
• B) It is easily and readily converted into money without any loss in purchasing power.
• C) The face value of the asset is somewhat less than its value when converted into currency.
• D) The asset holds its value over time.

---

Definitions:

Estimated Activity Base

A projection or forecast used in budgeting and accounting to allocate costs based on predicted levels of activity such as hours worked or units produced.

Work in Process

Inventory that includes goods in production but not yet completed. It's a stage between raw materials and finished goods in the manufacturing process.

Production Jobs

refer to specific manufacturing or production tasks or projects assigned to create goods or services, often tracked for costing purposes.

Work in Process

Goods that are in the process of being manufactured but are not yet complete.