Which of the following descriptions apply to cash equivalents?
A)Cash equivalents' values change because the interest rate changes.
B)Cash equivalents are invested in fixed assets.
C)Cash equivalents are highly liquid.
D)Cash equivalents are long-term.

Question

Quizplus · Accepted Answer

Cash equivalents are highly liquid and typically refer to short-term investments that can easily be converted to cash, such as treasury bills or money market funds. They are not invested in fixed assets and their values are relatively stable, not subject to significant changes based on interest rate fluctuations. They are also not long-term investments, as they are intended to be readily available cash reserves.

Which of the Following Descriptions Apply to Cash Equivalents