Which of the following is more indicative of a business's financial strength?
A)Short-term investments
B)Prepaid expenses
C)Accounts payable
D)Large inventories

Question

Quizplus · Accepted Answer

Short-term investments are more indicative of a business's financial strength as it signifies that the company has excess cash that it can invest for quick returns. Prepaid expenses may indicate that the business has already paid for expenses but does not necessarily reflect liquidity or financial strength. Accounts payable indicates the amount the company owes to its suppliers, and large inventories may indicate that the business has excess stock that may sit idle, tying up capital.

Which of the Following Is More Indicative of a Business's