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  3. liquidity is a company's ability to convert assets

Liquidity is a company's ability to convert assets to cash or acquire cashthrough a loan...

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Finance

Liquidity is a company's ability to convert assets to cash or acquire cashthrough a loan or money in the bankto pay its short-term obligations or liabilities. Which one of these transactions will increase the liquidity of a firm?

1. Cash payment of employee wages

2. Credit sale of inventory at cost

3. Payment of accounts payable

4. Cash purchase of inventory

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