Which of the following lists of assets is ordered from the MOST liquid to the LEAST...

Which of the following lists of assets is ordered from the MOST liquid to the LEAST liquid?

Cash, the balance in a checking account, diamonds, the balance in a savings account.
The balance in a checking account, $100 bill, 1000 shares of IBM stock, the balance in a savings account.
$5 bill, the balance in a checking account, the balance in a savings account, 1000 shares of IBM stock.
The balance in a checking account, diamonds, cash, credit cards.

Expert Solution

Option 'C' is correct.

Option 'A' is incorrect because we know diamonds are less liquid than savings account but it is placed before savings account in the option.

Option 'B' is incorrect as we know balance in a savings account is more liquid than 1000 shares as converting shares to cash requires few processing days but in the option, it is placed before savings account .

Option D is incorrect as we know diamonds are less liquid than cash ,still it is placed before cash in the option.

Hence, Option 'C' is correct as it has the correct order of sequence for the liquidity.

We use liquidity to determine how quickly assets can be converted to cash.

Rahul Sunny answered 2 years ago

Plant assets are usually listed in order from most liquid at least liquid tour false

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