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WAEC Financial Accounting 1998 Question 1

Question 1

Final Accounts of a Sole Trader

Which of the following is the least liquid?

  1. A.Stock
  2. B.Debtors
  3. C.Bills receivable
  4. D.Prepayment
  5. E.Machinery.
Show the answer and explanation

Answer: E (Machinery.)

Explanation

Machinery is a fixed asset kept for use, so it is the hardest to turn into cash.