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tino4ka555 [31]
2 years ago
8

What is meant by liquidity?

Business
1 answer:
BartSMP [9]2 years ago
3 0

Answer:

Liquidity is the term which is stated as the degree to which the asset or the security of the company which can be quickly sold or bought in the market at the price which states its intrinsic value.

In general term, it is defined as ease of converting the asset or security into cash.

Explanation:

The most liquid asset is cash as it is universally accepted and considered to be the standard for liquidity because it is quickly and easily be convertible  into other assets., while the other tangible assets like collectibles, real estate are all relatively illiquid.

Liquidity is of different types:

1. Market liquidity - Which refers to the extent of market like stock market, real estate market.

2. Accounting liquidity - It evaluates the ease with which the company or individual could meet or fulfill the financial obligations with the liquid assets which are available to them.

The accounting liquidity is measured with following ratios - Cash ratio, Quick ratio and Current ratio.

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Answer:

The correct answer is (C) Reported as a current asset.

Explanation:

The current asset, also called a current or liquid asset, is the asset of a company that can become liquid (become money) in less than twelve months. For example, bank money, stocks, and financial investments.

We can also understand the current asset as all those resources that are necessary to carry out the day-to-day activities of the company. It is known as current because it is a type of asset that is in continuous movement, can be sold, used, converted into liquid money or delivered as payment without too much difficulty.

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3 years ago
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On the Budget Challenge Cash Flow Spreadsheet (CFS) (this file is downloadable on the "How to Play" page of the website), what c
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What is a major plan that organizes several other plans?
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2 years ago
Charity Hospital is holding its annual gala in a fancy downtown hotel. Tickets are $200 each, and the organization estimates tha
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Based on the amount paid for the tickets and their fair value, the portion that is entitled to <u>charitable contribution deduction</u> is $75.

When one buys a ticket to a charitable event, there is a chance that some of the ticket price can be treated as a charitable contribution deduction.

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= 200 - 125

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Find out more on <u>charitable contribution deductions</u> at brainly.com/question/8706786.

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