Question

Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.

A. True
B. False

Answer 1

The statement is True. Economic resources are cash or items that are expected to be converted into cash during the current period or soon thereafter to pay current liabilities.

Step-by-step explanation:

The statement in question is True. Economic resources are cash or items that are expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.

For example, if a business has accounts receivable (money that is owed to them by their customers), it is considered an economic resource because it is expected to be converted into cash in the near future. Similarly, if a business has inventory that they plan to sell, it is also considered an economic resource because it will generate cash when sold.

Therefore, economic resources play a crucial role in a business's ability to meet its current obligations and contribute to its overall financial health.