A Company's Assets That Can Be Easily Converted into Cash

question 30

Multiple Choice

A company's assets that can be easily converted into cash are called

• A)fixed assets.
• B)long-term assets.
• C)current assets.
• D)equity.
• E)revenue assets.

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Definitions:

Period Costs

Expenses that are not directly tied to the production process and are instead charged to the periods in which they are incurred, such as sales and administration expenses.

Work in Process Inventory

Work in process inventory consists of goods partially completed, not yet ready for sale, representing the cost of raw materials, labor, and overhead involved in production.

Direct Materials

Raw materials that can be directly attributed to the production of goods.

Direct Labor

The wages and related expenses for employees who are directly involved in the production of goods or services.