A Short-Term Investment in a U

question 34

Multiple Choice

A short-term investment in a U.S.Treasury bill costs $24,200 and will mature in six months at $25,000.Management intends to hold the investment until it matures.The entry to record receipt of cash at maturity is: (No prior entries were made to recognize revenue.)

• A)Cash 25,000 Short-Term Investments 24,200
• Interest Income 800
• B)Cash 25,000 Short-Term Investments 25,000
• C)Cash 24,200 Short-Term Investments 24,200
• D)Cash 25,000 Short-Term Investments 24,200
• Gain on Sale of Investments 800

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Definitions:

Shipment Contract

A contract where the seller is required to send the goods to the buyer, but the title to the goods passes when the seller fulfills their obligation to ship.

Carrier

An entity that provides transportation services for goods or individuals.

Destination

The destination where a person or an item is headed or directed.

Limitation of Damages

A legal principle that restricts the amount of compensation an injured party can receive.