ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    Liquidity is the ability to accommodate ______ in

    liability and _____ in assets.
    A Decrease; increase Correct Answer Incorrect Answer
    B Increase; decrease Correct Answer Incorrect Answer
    C Increase, increase Correct Answer Incorrect Answer
    D Decrease, decrease Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Liquidity is ability to accommodate decrease in liability & / increase in assets. Liabilities are the sources of funds and hence a decrease in liabilities means reduction in sources or repayment, which is not managed well can lead to liquidity problems. An increase in assets requires┬а liquidity and hence needs to be managed well.

    Practice Next
    More Financial Management Questions

    Relevant for Exams:

    ask-question