Cash equivalents are really? A- inventories held for re-sale during the accounti

Question

Cash equivalents are really? A- inventories held for re-sale during the accounting period B- sale of fixed assets above book value C- increase in the loss of doubtful accounts receivable D- highly liquid short term investment that can be readily converted into cash in three months or less E- none of the above answers is correct Cash equivalents are really? A- inventories held for re-sale during the accounting period B- sale of fixed assets above book value C- increase in the loss of doubtful accounts receivable D- highly liquid short term investment that can be readily converted into cash in three months or less E- none of the above answers is correct A- inventories held for re-sale during the accounting period B- sale of fixed assets above book value C- increase in the loss of doubtful accounts receivable D- highly liquid short term investment that can be readily converted into cash in three months or less E- none of the above answers is correct

Explanation / Answer

Cash equivalents means asset that can be converted into cash reasily,an investment can be considered as cash equivalent if the maturity period is three months or less, so the answer is Part D .i.e highly liquid short term investment that can be readily converted into cash in three months or less.

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