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

Question

Quizplus · Accepted Answer

Cash equivalents are short-term,highly liquid investments purchased within three months of maturity.They are considered equivalent to cash because they are both (1)readily convertible to known amounts of cash and (2)so near to maturity that their value is unlikely to change.

Cash and Cash Equivalents Include Assets That