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:

Void

Refers to a contract or legal agreement that lacks validity and is therefore unenforceable by law.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the parties involved to be enforceable.

Unenforceable

A term used to describe a contract or clause that cannot be legally enforced or compelled in a court of law.

Valid

Having legal force, or being legally binding and enforceable.