When Looking at the Current Assets Section of a Company's

question 160

Multiple Choice

When looking at the current assets section of a company's balance sheet:

• A) cash equivalents are considered short-term investments.
• B) short-term investments include stocks and bonds of other companies that the company intends to sell within the next year.
• C) merchandise inventory is considered a prepaid expense.
• D) accounts payable are amounts the company expects to collect from customers within the next year.

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Definitions:

Primary Liable

Being the first or main party responsible for fulfilling an obligation or compensating for damages.

Co-signs

The act of signing a loan or agreement jointly with another person, thereby assuming equal responsibility for the repayment.

Collectively

refers to actions or measures taken as a whole by a group of people or entities.

Primarily Liable

Having the main or first responsibility for a debt or obligation.