In order to be classified as a cash equivalent, an investment must have a maturity date of

Question

Quizplus · Accepted Answer

According to accounting standards, investments can be classified as cash equivalents only if they meet three criteria: they must have a maturity date of three months or less from the date of purchase, they must be highly liquid, and they must be easily convertible into known amounts of cash without significant risk of changes in value. Therefore, the best choice is D as it states that the investment must have a maturity date of three months or less.

In Order to Be Classified as a Cash Equivalent, an Investment