An item or transaction will qualify for classification as a cash equivalent:
A) only if it has a remaining term of more than three months but no more than six months.
B) only if its term to maturity is no greater than twelve months.
C) only if it has a fixed maturity date of greater than twelve months.
D) only if it has a maturity of less than three months.

Question

Quizplus · Accepted Answer

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

An Item or Transaction Will Qualify for Classification as a Cash