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Homework answers / question archive / 1)PR 17 29 Cash equivalents are securities that O management intends to convert into cash within the normal operating cycle O management intends to convert into cash within one year have maturity dates of at least six months have maturity dates of 3 months or less 2)Current assets are cash or other assets that are reasonably expected to be converted into cash, sold, or consumed within O one normal operating cycle O one year or normal operating cycle, whichever is shorter O one year or normal operating cycle, whichever is longer O one year A 10
1)PR 17 29 Cash equivalents are securities that O management intends to convert into cash within the normal operating cycle O management intends to convert into cash within one year have maturity dates of at least six months have maturity dates of 3 months or less
2)Current assets are cash or other assets that are reasonably expected to be converted into cash, sold, or consumed within O one normal operating cycle O one year or normal operating cycle, whichever is shorter O one year or normal operating cycle, whichever is longer O one year A 10
1)
Cash equivalents are securities in the balance sheet that can be converted into cash immediately. Cash and cash equivalents are the most liquid of short term assets. Examples of cash equivalents include commercial paper, treasury bills etc with maturity date of 3 months or less.
Thus option D is correct, cash equivalents are security with maturity 3 months or less.
Securities with maturity mentioned in other parts A, B and C are to be recorded in "other current assets" head but does not come under cash equivalents head.
2)
Answer:One year or normal operating Cycle , whichever is longer.
Explanation:
Current assets comprise of cash and other assets judiciously anticipated to be converted to cash or expended within the coming year, or within the normal operating cycle of the business if that's longer than one year.
