Question

Which of the following could be true if one decreases their long term liability and increases their liquid assets?
a.
Paid off credit card balance and added money to savings.
b.
Paid off medical bills and invested money.
c.
Paid down mortgage and received a cash prize.
d.
Paid taxes owed and bought a car.

Answer 1

c.

Paying down a mortgage reduces a long-term liability, and receiving a cash prize increases liquid assets (cash). The other choices involve short-term liabilities or non‑liquid assets.