Which of the Following Statements Is True

question 93

Multiple Choice

Which of the following statements is true?

• A) Investments in commercial paper or U.S.Treasury bills must be treated as cash equivalents.
• B) Investments in stock cannot be treated as cash equivalents because they are not convertible into a known amount of cash.
• C) Investments which are convertible into a known amount of cash and mature within three months after the balance sheet date are treated as cash equivalents.
• D) Investments in money market accounts cannot be treated as cash equivalents because they do not have a specific maturity date.

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Definitions:

Materials Requisition

A document or electronic form used to request materials needed for production from the storeroom or inventory management.

Storeroom

A room used for storing goods, materials, or supplies within a business or organization.

Finished Goods

Items that are fully manufactured and available for purchase by consumers.

Underapplied

A situation where the allocated overhead costs are less than the actual overhead costs incurred.