Asked by
Jason De Montero
on Oct 27, 2024Verified
Only highly liquid investments with original maturities of less than six months at the date of purchase qualify as cash equivalents.
Cash Equivalents
Short-term investments with original maturities of three months or less that are readily convertible to cash and whose value is unlikely to change.
Highly Liquid
Assets that can be easily converted into cash with minimal impact on their value.
- Understand the concept of cash equivalents.
Verified Answer
AA
Learning Objectives
- Understand the concept of cash equivalents.