Asked by Emanuela Tigistu on Jun 29, 2024
Verified
All of the following statements about short-term investments are true except:
A) Short-term investments are also called marketable securities
B) Trading securities are always classified as short-term investments.
C) Short-term investments are listed below accounts receivable in the current asset section of the balance sheet.
D) Short-term assets must be readily marketable.
Marketable Securities
Financial instruments that are easily convertible into cash due to their high liquidity and short maturity period.
Trading Securities
Financial instruments bought and held primarily for the purpose of selling them in the near term to profit from price changes.
Short-Term Investments
Financial assets that are easily convertible to cash usually within a year, intended for temporary holding.
- Understand the accounting valuation and presentation of short-term investments on the balance sheet.
Verified Answer
Learning Objectives
- Understand the accounting valuation and presentation of short-term investments on the balance sheet.
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