Which of the Following Is Correct Regarding Liquidity

question 94

Multiple Choice

Which of the following is correct regarding liquidity?

• A) Liquidity measures how quickly an item can be paid.
• B) Accounts receivable is the most liquid asset.
• C) A balance sheet lists assets and liabilities in the order of relative liquidity.
• D) Equipment is a highly liquid asset.

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Definitions:

Incentive Theory

A theory in psychology that suggests behavior is motivated by a desire for rewards or incentives.

Protection Motivation Theory

A theory that explains how people are motivated to protect themselves from perceived threats by evaluating the severity, their vulnerability, and the efficacy of preventive measures.

Daily Travel

Refers to the routine trips individuals make on a regular basis, such as commuting to work or school and errands.

Practical Choice

A decision made based on efficiency, effectiveness, and pragmatism rather than emotional or aesthetic considerations.