An Asset Is Liquid If It

question 137

Multiple Choice

An asset is liquid if it

• A) is of intrinsic value.
• B) can be exchanged for other goods and services.
• C) is a store of value.
• D) can be obtained or disposed of without losing much of its nominal value.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its decrease in value due to use, wear and tear, or obsolescence.

Depletion

The allocation of the cost of natural resources over their productive life, commonly used in industries like mining and forestry.

Amortization

The gradual reduction of a debt or the spreading of an intangible asset's cost over its useful life.

Depreciation Expense

The allocation of the cost of a tangible fixed asset over its useful life, reflecting the asset's consumption or wear and tear.