Which of the Following Is the Most Liquid Asset

question 108

Multiple Choice

Which of the following is the most liquid asset?

• A) Prepaid expenses
• B) Inventory
• C) Cash equivalents
• D) Accounts receivable

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Definitions:

Depreciation Deduction

A tax deduction representing the decrease in value of an asset over time, allowed to be deducted from taxable income.

Internal Revenue Code

The comprehensive federal law that governs all aspects of income tax in the United States.

Capital Investment

Funds invested in a firm or enterprise for the purpose of furthering its business objectives.

Manufacturing Sunk Cost

Costs that have already been incurred in the manufacturing process and cannot be recovered or altered by future decisions.