The Term Cash Equivalent Refers To

question 31

Multiple Choice

The term cash equivalent refers to:

• A)An item such as a money order,travelers' check,or check from a customer.
• B)An account receivable from a reliable customer who has always paid bills within the discount period.
• C)A guaranteed line of credit at the company's bank.
• D)Very liquid short-term investments such as U.S.Treasury Bills and commercial paper.

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Definitions:

Current Taxes Payable

This refers to the amount of taxes a company is obligated to pay to the government within the current fiscal year, not yet paid.

IRS

The Internal Revenue Service, a U.S. government agency responsible for the collection of taxes and enforcement of tax laws.

Reversing Temporary Difference

An accounting adjustment that reverses differences between tax and financial reporting over time.

Originating Temporary Difference

A difference that arises in a particular period between the book income and taxable income, which is expected to reverse in the future.