Passage Two

On the balance sheet, assets and liabilities are classified as either (61) or long-term to indicate their relative liquidity. Liquidity is a (62) of how quickly an item may be converted to cash. Therefore, (63) is the most liquid asset. Accounts receivable are a () liquid asset because the business expects to collect the amount in cash in the near future. (65) are less liquid than accounts receivable, and furniture and buildings are even less so.