An Item Considered to Be a Cash Equivalent in One

question 37

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.
• E) None of the given answers.

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Definitions:

Process Controls

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