Which one of the following statements concerning liquidity is correct?
A)Liquid assets generally earn higher rates of return than fixed assets.
B)If you can sell an asset next year at a price equal to its actual value,the asset is highly liquid.
C)Liquid assets are defined as those assets obtained within the past year.
D)The less liquidity a firm has,the lower the probability the firm will encounter financial difficulties.
E)Balance sheet accounts are listed in order of decreasing liquidity.

Question

Quizplus · Accepted Answer

The statement that is correct concerning liquidity is that balance sheet accounts are listed in order of decreasing liquidity. This means that the most liquid asset, which is usually cash, is listed first and fixed assets such as property or equipment are listed last.

Which One of the Following Statements Concerning Liquidity Is Correct