1. Equipment is an example of a:

A.current liability.

B.longminusterm

liability.

C.current asset.

D.longminusterm

asset.

2. What is liquidity?

A.Liquidity is a measure of the fragility of certain types of inventory.

B.Liquidity is gross profit minus operating expenses.

C.Liquidity is the ability to convert an asset to cash quickly.

D.Liquidity is a shipping term that applies to freight sent by boat.

3. Under the periodic inventory system, the amount of inventory is:

A.constantly updated.

B.only known when a physical count is taken.

C.adjusted after each purchase.

D.adjusted after each sale.