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WAEC Financial Accounting 2024 Question 39

Question 39

Interpretation of Accounts

Liquid assets refer to

  1. A.Cash and other assets that can be easily converted into cash.
  2. B.Cash and other current assets.
  3. C.Current assets less current liabilities.
  4. D.Bank balance less overdraft.
Show the answer and explanation

Answer: A (Cash and other assets that can be easily converted into cash.)

Explanation

Liquid assets are cash and items quickly turned into cash (current assets less stock).