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Jun 27, 2024 · A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and...
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.
Jul 2, 2024 · What is a Liquid Asset? A liquid asset is any asset that is readily convertible into cash within a short period of time, and which suffers no loss in value as a result of the conversion. Convertibility is assisted by the presence of a large market in which there are many participants, and in which it is easy to transfer ownership from the buyer ...
- 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.
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.
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Jun 8, 2022 · In accounting terms, liquid assets are cash or cash equivalents that are readily convertible to cash. Their liquidation is secure, meaning that the holder can convert them for cash without any issues.
