What are examples of liquid assets?

Examples of liquid assets may include cash, cash equivalents, money market accounts, marketable securities, short-term bonds, or accounts receivable. A liquid asset is cash on hand or an asset that can be easily converted to cash. In terms of liquidity, cash is supreme since cash as legal tender is the ultimate goal.

What is the difference between liquid assets and illiquid assets?

Liquid assets give their owners quick and easy access to cash. They can quickly be sold, granting access to their cash value, in contrast to illiquid assets, which may take more time and effort to sell or trade. Generally, you should keep a portion of your overall assets as liquid assets, in case you need to get your hands on some cash.

How are liquid assets reported on a balance sheet?

For the purposes of financial accounting, a company’s liquid assets are reported on its balance sheet as current assets. A liquid asset is an asset that can easily be converted into cash within a short amount of time. Liquid assets generally tend to have liquid markets with high levels of demand and security.

What are examples of illiquid assets?

Some examples of inherently illiquid assets include houses and other real estate, cars, antiques, private company interests and some types of debt instruments. Certain collectibles and art pieces are often illiquid assets as well. Stocks that trade on over-the-counter (OTC) markets are also often less liquid than those listed on robust exchanges.