The three categories of short-term investments are:

Question

Quizplus · Accepted Answer

The three categories of short-term investments are trading, available-for-sale and held-to-maturity, as defined by Generally Accepted Accounting Principles (GAAP). Trading investments are those intended to be sold in the near future for a profit, available-for-sale investments are those that may be sold or held for a longer period of time, and held-to-maturity investments are those that the company intends to hold until maturity. Option A is incorrect because accounts receivable is not a type of investment, and option B is incorrect because held-for-sale is not a recognized category. Option D is incorrect because it does not accurately reflect the three types of investments recognized by GAAP.

The Three Categories of Short-Term Investments Are