Generally, the More Liquid an Asset Is, The

question 94

Multiple Choice

Generally, the more liquid an asset is, the:

• A) lower its purchasing power.
• B) lower its rate of return.
• C) higher its capacity to store value over time.
• D) higher its rate of return.

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Definitions:

Inventory

Assets held for sale in the ordinary course of business, as well as materials and supplies used in producing goods available for sale.

Chart of Accounts

The Chart of Accounts is an organized list of all accounts in the general ledger of a company, used for recording transactions and building financial statements, categorized by assets, liabilities, equity, revenues, and expenses.

Merchandising Business

A type of business that purchases finished products and sells them to consumers, making a profit from the markup.

Service Business

A company that provides intangible products, such as expertise or labor, rather than physical goods.