Question : Quick assets do not include
Option 1: Trade receivable
Option 2: Cash balance
Option 3: Inventories and prepaid expenses
Option 4: Marketable securities
Answer (1)
24th Jan, 2024
Correct Answer: Inventories and prepaid expenses
Solution : Answer = Inventories and prepaid expenses
Quick assets, which represent highly liquid assets, do not include inventories and prepaid expenses. Instead, they consist of cash balances, marketable securities, and trade receivables, which can be quickly converted into cash to meet short-term obligations or emergencies.
Quick assets = current assets – stock – prepaid expenses.
Hence, the correct option is 3.
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