An Item Considered to Be a Cash Equivalent in One

question 62

Multiple Choice

An item considered to be a cash equivalent in one company may not be considered as such in another.This is because:

• A) The operating cycle varies between companies.
• B) Companies have different balance dates and this will affect the measurement of the term to maturity.
• C) Companies use highly liquid items for purposes other than as part of their cash-management function.
• D) The working capital management policies of companies vary so an item may be considered very liquid in one company and not in another.

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Definitions:

Problem-Solving Report

A document that outlines a problem, analyzes potential solutions, and recommends the best course of action.

Progress Report

A document or update that provides stakeholders with information on the current status of a project, including what has been completed, what is in progress, and any issues encountered.

As-Needed Basis

A condition or situation in which actions are taken or resources are used only when required.

Appendix

An additional section at the end of a book or document, providing extra information, tables, or references not included in the main text.