Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following investments has the least liquidity?

Cash in a checking account

Real estate property

Certificate of deposit (CD) with a 5-year maturity

Common stock of a publicly traded company

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Verified step by step guidance

Understand the concept of liquidity: Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its value. Assets with higher liquidity can be converted into cash more readily.

Evaluate each option: Analyze the liquidity of each investment type provided in the question. For example, cash in a checking account is highly liquid because it can be accessed immediately, while other assets may require more time or effort to convert into cash.

Consider the characteristics of real estate property: Real estate is generally considered to have low liquidity because selling property often involves a lengthy process, including finding a buyer, negotiating terms, and completing legal and financial transactions.

Compare the liquidity of a Certificate of Deposit (CD): A CD with a 5-year maturity is less liquid than cash but more liquid than real estate. While it can be cashed out early, doing so may incur penalties, making it less accessible than cash.

Assess the liquidity of common stock: Common stock of a publicly traded company is relatively liquid because it can be sold quickly on the stock market, although its value may fluctuate based on market conditions. Compare this to the other options to determine the least liquid investment.