Which One of the Following Statements Concerning Liquidity Is Correct

question 32

Multiple Choice

Which one of the following statements concerning liquidity is correct?

• A)Fixed assets are more liquid than current assets.
• B)Balance sheet accounts are listed in order of decreasing liquidity.
• C)Liquid assets tend to be highly profitable.
• D)The less liquidity a firm has,the lower the probability the firm will encounter financial difficulties.
• E)Trademarks and patents are highly liquid.

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Definitions:

Overtime

Additional time worked by employees beyond their standard hours, often compensated at a higher pay rate.

Subcontracting

The practice of assigning or outsourcing part of the obligations and tasks under a contract to another party known as a subcontractor.

Stockouts

Instances when items are not available for sale due to insufficient stock.

Aggregate Planning

A production planning method that determines the necessary resources to meet projected demand over a future period, typically medium-term.