When the Investment Is Readily Convertible to Cash and the Investor

question 68

Multiple Choice

When the investment is readily convertible to cash and the investor plans to convert the investment to cash within one year, the investment is shown on the balance sheet as:

• A) short-term.
• B) long-term.
• C) equity.
• D) either long-term or short-term.

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Definitions:

Professional Corporation

A type of corporate entity for which many states offer incorporation options, designed for professions where the practitioners require a license, like doctors or lawyers.

Law Firm

A business entity formed by one or more lawyers to engage in the practice of law, providing legal services to clients.

Privately Owned

Properties or businesses that are owned by individuals or corporations rather than by the government or public.

Corporation

A legal entity recognized by law as separate from its owners, with rights to own assets, incur liabilities, and conduct business.