Short-term debt instruments that are held to earn interest income are recorded as
A) current assets at amortized cost.
B) non-current assets at amortized cost.
C) current asset at fair value.
D) non-current assets at fair value.

Question

Quizplus · Accepted Answer

Short-term debt instruments held to earn interest income are classified as current assets because they are expected to be converted into cash within one year or the operating cycle, whichever is longer. They are recorded at amortized cost if the intention is to hold them to maturity, reflecting the acquisition cost adjusted for amortization of discount or premium, if any.

Short-Term Debt Instruments That Are Held to Earn Interest Income