Question

Question 5

1. Short-term liquidity is

   		a company's ability to shift current liabilities into long-term liabilities.
   		a company's ability to meet current payments as they become due.
   		a company's ability to turn accounts receivable into cash.
   		current assets divided by current liabilities.
   		a company's ability to sell inventory.

Answer 1

Answer Short-term Liquidity is A company's ability to turn accounts receivable into cash. Reason - Short term means current assets that will converted into cash within a vear Accounts receivable balonces are converted into cash and when operay a client pays an invoice o o Accounts receivable is consider as current assets. Liquidity means a companys ability to raise on o collect magn short term assets to pay short form liabilities as they come due.