An Investment That Is Readily Convertible to a Known Amount

question 158

Multiple Choice

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n) :

• A)Short-term marketable equity security.
• B)Operating activity.
• C)Common stock.
• D)Cash equivalent.
• E)Financing activity.

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Definitions:

Raw Material Purchases

The acquisition of the basic materials needed for the production of goods, which are typically bought from suppliers and used in the manufacturing process.

Budgeted Sales

The anticipated revenue from goods or services sold, set during the budgeting process for a specific time period.

Credit Sales

Sales made by a business where the customer purchases goods or services on credit and payment is received at a later date.

Finished Goods Inventory

The stock of completed products that are ready for sale but have not yet been sold.