Cash and cash equivalents include:
A)assets that have stable long-term value.
B)assets that are short-term,highly liquid,and are purchased by the entity within three months of maturity.
C)assets that consistently grow in value over the long run.
D)assets that are expected to be used up within a year.

Question

Quizplus · Accepted Answer

Cash and cash equivalents are short-term, highly liquid assets that can be easily converted into cash. These assets typically have a maturity of three months or less from the date of purchase. Examples of cash equivalents include treasury bills, commercial paper, and money market funds. Therefore, option B is the most appropriate choice.

Cash and Cash Equivalents Include