In terms of liquidity, merchandise inventory is
A) more liquid than cash.
B) more liquid than accounts receivable.
C) more liquid than prepaid expenses.
D) less liquid than store equipment.

Question

Quizplus · Accepted Answer

Merchandise inventory is more liquid than prepaid expenses because it can be sold and converted into cash more readily than prepaid expenses, which are typically not convertible to cash.

In Terms of Liquidity, Merchandise Inventory Is