Question

Rank order, from lowest to highest liquidity, the following: a) Inventories b) Cash and Marketable Securities c) Fixed Assets d) Accounts Receivable Group of answer choices c) then a) then b) then d) c) then a) then d) then b) c) then d) then b) then a) c) then d) then a) then b)

Answer 1

- Liquid assets are those assets which can be easily converted into Cash within very short period.

Ranking from lowest to highest liquidity, the following:-

Rank 1- Fixed Assets (as Fixed assets are not easily converted into Cash)

Rank 2 - Inventories (Inventories take time to be sold and then if sold on credit will take more time)

Rank 3 - Accounts receivables (they are liquid cash but can take some time)

Rank 4 - Cash

So, the correct choice is- c) then a) then d) then b)

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