Which of the following lists the accounts in order of liquidity?

Question

Quizplus · Accepted Answer

The order of liquidity is the order in which the accounts can be readily converted into cash. 
Cash is the most liquid asset, followed by accounts receivable (which can be collected relatively quickly), inventory (which can be sold for cash), and finally furniture (which is the least liquid asset as it cannot be easily converted into cash). 
Thus, the correct order of accounts in terms of liquidity is: Cash, Accounts Receivable, Inventory, and Furniture, which is only listed in option B.

Which of the Following Lists the Accounts in Order of Liquidity