Search results
Jun 27, 2024 · A liquid asset is an asset that can easily be converted into cash within a short amount of time. Liquid assets generally tend to have liquid markets with high levels...
What is a Liquid Asset? A liquid asset is cash on hand or an asset other than cash that can be quickly converted into cash at a reasonable price. In other words, a liquid asset can be quickly sold on the market without a significant loss of its value.
Nov 11, 2024 · In accounting, liquid assets are assets that can be easily converted into cash without a significant impact on their market value. They are valuable for businesses as they provide rapid access to required funds to cover short-term obligations or unexpected expenses.
- Cash. Includes physical money (local and foreign currency) as well as the savings account and/or current account balances.
- Cash equivalents. Cash equivalents are investment securities with a maturity period not exceeding a year. Examples include treasury bills, treasury bonds, certificates of deposit, and money market funds.
- Marketable securities. Stocks, bonds, and exchange traded funds (ETFs) are examples of marketable securities with a high degree of liquidity. They can be sold easily and it usually takes just a few days to receive the cash from their sale.
- Accounts receivable. Money owed to a business by its customers for goods and services provided makes up accounts receivable. The liquidity of accounts receivable varies.
Jan 22, 2023 · In corporate finance, liquid assets are those that can be used to pay off debts in a hurry. The most common examples of liquid assets are cash – on-hand or deposited in a...
- Claire Boyte-White
Jul 2, 2024 · A liquid asset is readily convertible into cash within a short period of time, and which suffers no loss in value as a result of the conversion.
People also ask
What is a liquid asset?
What are examples of liquid assets?
Is a liquid asset a cash equivalent?
How are liquid assets reported on a balance sheet?
Are liquid assets a part of your net worth?
What is liquidity in accounting?
Definition: A liquid asset is a resource that can easily be converted into cash and used to pay for goods and services or pay off liabilities. Assets that can be readily traded for goods and services are also considered to be liquid even if they can’t be converted into cash.