21
QuizMultiple Choice

Net Worth

Question 21 • Financial Math - MA2007 CR

What is the difference between assets and liquid assets?

Answer
A
All assets represent money, but only liquid assets can be easily turned into spendable money and used to pay debts.
B
An asset represents a credit or a positive value, while a liquid asset represents a debit or a negative value.
C
Assets are money gained from your job, while liquid assets are money gained from sources such as investments or inheritances.
D
An asset is owned by you alone, while a liquid asset is shared among several people, such as a married couple or a group of investors.

Explanation

Assets are things of value that you own, while liquid assets are assets that can be quickly converted into spendable money, such as cash or money in a checking account. That makes liquid assets especially useful for paying debts or other expenses. Choice A describes this difference; the other choices incorrectly define liquid assets as debts, particular sources of income, or shared property.

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