Asked by sujana dontukurthy on May 11, 2024
Verified
Cash equivalents are investments that are readily converted to known amounts of cash and mature within three months.
Cash Equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Mature
In finance, it refers to the stage at which an investment or financial instrument reaches its final due date and the principal is returned to the investor.
- Familiarize oneself with the system of classifying and the accounting procedures for short-term and long-term investments.
Verified Answer
JB
Jason BrownMay 12, 2024
Final Answer :
True
Explanation :
Cash equivalents are investments that are readily convertible to cash and mature within three months or less. Examples include Treasury bills, money market funds, and commercial paper.
Learning Objectives
- Familiarize oneself with the system of classifying and the accounting procedures for short-term and long-term investments.