BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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current assets
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current ratio
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current liabilities
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None of the above
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Detailed explanation-1: -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-2: -Assets that can be swiftly turned into cash are called cash equivalents. The risk associated with cash equivalents is minimal and can be easily converted. Savings accounts, T-bills, and money market products are some examples. Current liabilities are debts with a one-year maturity.
Detailed explanation-3: -Liquid assets, however, are the assets that can be easily, securely, and quickly exchanged for legal tender. Your inventory, accounts receivable, and stocks are examples of liquid assets-things you can quickly convert to hard cash.