ECONOMICS

Detailed explanation-1: -A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities. Both individuals and businesses can be concerned with tracking liquid assets as a portion of their net worth.

Detailed explanation-2: -Current assets are those assets which can be converted into cash or can be used to pay off liabilities within a time span of 12 months, i.e. one year. Some of the examples of current assets are cash, cash equivalents, inventories, debtors, bills receivables, etc.

Detailed explanation-3: -Liquid assets means cash or cash equivalents which can be easily converted to cash in a very short time. Inventories and prepaid expenses are not considered as liquid asset else every current asset is liquid asset. Q.

Detailed explanation-4: -Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company’s assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.