Question

What is the definition of Cash Equivalents?

a.

Long-term investments subject to significant value changes

b.

Short-term, highly liquid investments with significant risk of changes in value

c.

Short-term, highly liquid investments that are readily convertible into known amounts of cash and have insignificant risk of changes in value

d.

Investments held for long-term purposes

Posted under IC 89 Management Accounting

Answer: (c).Short-term, highly liquid investments that are readily convertible into known amounts of cash and have insignificant risk of changes in value Explanation:Cash Equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash and have an insignificant risk of changes in value.

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