What are spontaneous assets?

Accounting Dec 17, 2020

Expert Solution

Spontaneous assets are assets that occur due to the day-to-day operations of a business like its merchandise inventory or accounts receivable. These assets are ones that tend to be highly liquid and matter in assessing the firm's financial health and are known on balance sheets as the current assets. Spontaneous assets are added together and divided by the current liabilities to find out whether or not a business can pay its debts that year with what it will likely turn into cash.

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