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UI Post-UTME Financial Accounting 2024 (Model questions) Question 6

Question 6

Final Accounts of a Sole Trader

Which of the following is the most liquid

  1. A.Stock
  2. B.debtors
  3. C.machinery
  4. D.loose tools
Show the answer and explanation

Answer: B (debtors)

Explanation

Liquidity means how quickly an asset becomes cash. Debtors only need to be collected; stock must first be sold.