With regard to liabilities, liquidity refers to
A)a company's ability to convert its assets to cash to pay its liabilities
B)a company's ability to use its financial resources to adapt to change
C)a company's operating cycle
D)only liabilities and not assets

Question

Quizplus · Accepted Answer

Liquidity refers to a company's ability to convert its assets into cash to pay its liabilities. In other words, it is the ease with which a company can meet its short-term financial obligations. Therefore, only option A is the correct choice.

With Regard to Liabilities, Liquidity Refers to