The term cash equivalent refers to:
A)An item such as a money order,travelers' check,or check from a customer.
B)An account receivable from a reliable customer who has always paid bills within the discount period.
C)A guaranteed line of credit at the company's bank.
D)Very liquid short-term investments such as U.S.Treasury Bills and commercial paper.

Question

Quizplus · Accepted Answer

Cash equivalent refers to very liquid short-term investments which can be easily converted into cash, such as U.S. Treasury Bills and commercial paper. Options A, B, and C are not considered cash equivalents as they may not be readily convertible to cash or may involve credit risk.

The Term Cash Equivalent Refers To