An item considered to be a cash equivalent in one company may not be considered as such in another.This is because:
A) The operating cycle varies between companies.
B) Companies have different balance dates and this will affect the measurement of the term to maturity.
C) Companies use highly liquid items for purposes other than as part of their cash-management function.
D) The working capital management policies of companies vary so an item may be considered very liquid in one company and not in another.

Question

Quizplus · Accepted Answer

The Answer of An item considered to be a cash equivalent in one company may not be considered as such in another.This is because:
A) The operating cycle varies between companies.
B) Companies have different balance dates and this will affect the measurement of the term to maturity.
C) Companies use highly liquid items for purposes other than as part of their cash-management function.
D) The working capital management policies of companies vary so an item may be considered very liquid in one company and not in another.

An Item Considered to Be a Cash Equivalent in One