Multiple Choice
Which of the following is NOT a type of integration or merger commonly discussed in accounting and business combinations?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is the least liquid asset?
A
Accounts Receivable
B
Land
C
Cash
D
Inventory
Verified step by step guidance1
Understand the concept of liquidity: Liquidity refers to how quickly and easily an asset can be converted into cash without significant loss of value.
Review the options provided: Accounts Receivable, Land, Cash, and Inventory.
Analyze each asset's liquidity: Cash is the most liquid asset as it is already in the form of money. Accounts Receivable is relatively liquid because it represents money owed to the company that can be collected soon. Inventory is less liquid because it requires selling goods to convert them into cash. Land is the least liquid because it typically takes time to sell and may involve significant transaction costs.
Compare the liquidity of the assets: Based on the analysis, rank the assets from most liquid to least liquid: Cash > Accounts Receivable > Inventory > Land.
Conclude that Land is the least liquid asset among the options provided.
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