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 asset classes is generally considered to be the least liquid?

Inventory

Accounts receivable

Property, plant, and equipment

Cash and cash equivalents

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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. The more liquid an asset, the faster it can be converted into cash.

Analyze each asset class: Start by evaluating the liquidity of each option provided in the question. For example, cash and cash equivalents are the most liquid because they are already in cash form or can be converted immediately.

Compare inventory and accounts receivable: Inventory is less liquid than accounts receivable because inventory must first be sold to generate cash, whereas accounts receivable represents amounts already owed to the company and can be collected more quickly.

Evaluate property, plant, and equipment (PPE): PPE is considered the least liquid because these are long-term assets that cannot be easily or quickly converted into cash. Selling PPE often requires significant time and effort, and the sale may involve a loss in value.

Conclude based on the analysis: Based on the liquidity hierarchy, property, plant, and equipment is the least liquid asset class among the options provided.