The correct answer is: A. Current assets – (Stock + Work in progress)
Liquid assets are assets that can be easily converted into cash. They include cash, short-term investments, and accounts receivable. Quick assets are a subset of liquid assets that also include short-term marketable securities.
Stock and work in progress are not considered liquid assets because they cannot be easily converted into cash. Stock is inventory that a company has on hand, while work in progress is inventory that is in the process of being manufactured. Both of these types of assets require time to convert into cash.
Therefore, the correct answer is A. Current assets – (Stock + Work in progress). This equation will give you the total amount of liquid assets that a company has.
Here is a brief explanation of each option:
- Option A: Current assets – (Stock + Work in progress)
This is the correct answer. It gives you the total amount of liquid assets that a company has. - Option B: Current assets + Stock + Work in progress
This is not the correct answer. It includes stock and work in progress, which are not liquid assets. - Option C: (Current assets + Stock) + Work in progress
This is not the correct answer. It includes stock twice, which is not necessary. - Option D: (Current assets + Work in progress) – Stock
This is not the correct answer. It does not include all of the liquid assets that a company has.