Which one of the following represents the most liquid asset?
A)$100 account receivable that is discounted and collected for $96 today
B)$100 of inventory which is sold today on credit for $103
C)$100 of inventory which is discounted and sold for $97 cash today
D)$100 of inventory that is sold today for $100 cash
E)$100 accounts receivable that will be collected in full next week

Question

Quizplus · Accepted Answer

Liquidity refers to how quickly and easily an asset can be converted into cash without significant loss in value. Among the options, D) $100 of inventory that is sold today for $100 cash represents the most liquid asset because it is converted into cash immediately at its full value.

Which One of the Following Represents the Most Liquid Asset