Which of the Following Items Would Be Considered a Cash

question 99

Multiple Choice

Which of the following items would be considered a cash equivalent if it was held at the balance sheet date?

• A)U.S.Treasury bill purchased when there were 90 days until maturity
• B)Commercial paper with a six-month maturity that was purchased at the issue date
• C)The common stock of a company traded on the New York Stock Exchange that was purchased 30 days before the balance sheet date
• D)U.S.Treasury note that matures two years after it is issued and that was purchased four months before the balance sheet date

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Definitions:

Economic Order Quantity Model

A mathematical model that determines the optimal order size that minimizes the total cost of holding and ordering inventory.

Production Order Quantity Model

A mathematical model used to determine the optimal order quantity that minimizes total inventory costs, considering both holding and setup costs.

Annual Setup Costs

The total expenses incurred from setting up machinery or equipment for production runs in a factory, accumulated on a yearly basis.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, including costs related to processing, shipping, and handling.