Final answer:
The student's question pertains to calculating merchandise and current account balances using a balance sheet. Liquidity is highlighted as an important factor, differentiating cash as the most liquid asset in comparison to other forms of payment like checks or credit cards.
Step-by-step explanation:
The question refers to the task of filling in a financial table and calculating the merchandise balance and current account balance. To accomplish this, one would use the balance sheet, which is an accounting tool listing assets and liabilities. The merchandise balance would often reflect the trade balance, which is the difference between a country's imports and exports of goods. The current account balance includes the merchandise balance but also considers services, income, and current transfers.
Liquidity is a key concept when discussing financial assets and money. Liquid assets, like cash, are those that can easily and quickly be converted to a medium for purchase or payment. In contrast, items like checks or credit cards, while they can ultimately be used to facilitate transactions, are not considered as liquid as cash, since they require additional steps to access the corresponding funds.