The Concept of a Self-Liquidating Asset Implies That

question 61

Multiple Choice

The concept of a self-liquidating asset implies that

• A) the working capital associated with a product will be liquidated within a one year period.
• B) all the product will be sold, receivables collected and bills paid over the time period specified.
• C) assets associated with the production of a product will be liquidated over the depreciable life of the assets.
• D) self-liquidating assets be financed by long-term sources of capital.

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Definitions:

Securities

Financial instruments representing ownership (stocks), a debt agreement (bonds), or rights to ownership (derivatives).

Asset

Any resource owned or controlled by a business or an individual with the expectation that it will provide future economic benefits.

Articles Of Incorporation

Legal documents filed with a government body to legally document the creation of a corporation.

Indenture Contract

A formal legal agreement, bond, or document specifying the terms and conditions between parties, often used in finance for bonds or loans.