What is the term for taking a sum of money and reducing it in size?

The term "capital liquidation" refers to the process of converting assets into cash or cash equivalents, effectively reducing their size or value. This action is typically taken to pay off debts or to free up cash for other uses. In the context of the question, it captures the essence of depleting a financial resource by selling off capital, thereby decreasing the overall amount of money or value held.

Addressing the other terminology: debt liquidation focuses more on eliminating obligations through payment rather than reducing a sum of money itself. Capital accumulation refers to the process of increasing wealth or value, which is the opposite of reduction. Capital expansion involves growing or increasing the resources available, thus contradicting the idea of reducing a sum of money. Therefore, capital liquidation is the most appropriate term for the action of taking a sum of money and reducing it in size.