For an investment to be classified as a current asset, a. The investment must be easily convertible

Question:

For an investment to be classified as a current asset,

a. The investment must be easily convertible to cash.

b. The investor must intend to convert the investment to cash within one year or current operating cycle, whichever is longer, or use it to pay a current liability.

c. Both a and b must be met for the investment to be classified as a current asset.

d. Neither a nor b are relevant to the classification of an investment as a current asset.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting

ISBN: 978-0134725987

12th edition

Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

See More Books

Question Posted: Jun 19, 2019 08:25 AM

See More Questions

Cumby Corporation is a golf equipment retailer that owns 1,000 common shares of Suncor Energy Inc. It intends to sell these shares if it needs cash. (a) Is the investment in Suncor considered a...
What are the guidelines that accountants use to decide whether an investment should be classified as a current asset?
As described in a recent annual report, Polaroid Corporation designs, manufactures, and markets worldwide a variety of products primarily in instant image-recording fields, including instant...
Drag and drop the protocols from the bank to their respective layer on the OSI and TCP/IP Model. Not every layer will have protocols associated with it. Protocols TCP/IP Model OSI Model Application...
Show that T(x, y) = (0, 0) defines a linear operator on |R2| but T(x, y) = (1, 1) does not.
Find the standard equation of the circle. -2-1 2 12
5-1. Organizational buyers are ___________.
Consider the January transactions for Davis Consulting that were presented in Chapter 5. (Cost data have been removed from the sale transactions.) Davis uses the perpetual inventory system. Jan. 2...
Jack inherits stock (a capital asset) from his brother, who died in March of 2022, when the property had a $6.7 million fair market value (FMV). This property is the only property included in his...
The proposed rates were not in the range the CEO expected given the pricing analysis. The CEO has asked the pricing actuary to verify the total projected loss cost excluding potential large storm...
On September 30, 2018, Rittex, Inc., purchased 5% bonds of McPhee Corporation at 97 as a long-term, held-to-maturity investment. The maturity value of the bonds will be $46,000 on September 30, 2023....
Continental Bank, a nationwide banking company, owns many types of investments. Continental paid $550,000 for equity securities on December 5. Continental owns less than 10% of the stock of the...
Angela Corporation issues 2,000 convertible bonds at January 1, 2011. The bonds have a three-year life, and are issued at par with a face value of $1,000 per bond, giving total proceeds of...
5) A frictionless rod of length L rotates counterclockwise in the with constant angular speed w at an angle a to the z axis. A bead of mass m, free to slide on the rod, leaves the origin with initial...
1) Louisa is a corn farmer in Illinois. She anticipates a harvest in August of 3 million bushels of yellow corn. Today is May. Louise plans to hedge her sale of corn in August using corn futures...
2. DETAILS MY NOTES In a statistical test, we have a choice of a left-tailed test, a right-tailed test, or a two-tailed test. Is it the null hypothesis or the alternate hypothesis that determines...
2. The model of a two-story building shown in Figure 2. The girders are assumed to be rigid, and the columns have flexural rigidities EI and EI2, with negligible masses. The stiffness of each column...
Prepare journal entries to record these transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually....
A solid piece of plastic, with a density of 890 kg/m 3 , is placed in oil with a density of 830 kg/m 3 and the plastic sinks (1). Then the plastic is placed in water and it floats (2). (a) What...
Match the following. Answers may be used more than once: Measurement Method A. Amortized cost B. Equity method C. Acquisition method and consolidation D. Fair value method Reporting Method 1. Less...
Excerpts from the 2008 financial report of Inter, a computer-processor manufacturer, are as follows (dollars in millions). Review this information, calculate relevant ratios from figure, and explain...
The chief executive officer of Ginny's Fashions has included the following financial statements in a loan application submitted to Priority Bank. The company intends to acquire additional equipment...
The 2011 and 2012 financial statements of Ken's Sportswear follow: a. Compute all relevant ratios for 2012.b. Prepare common-size financial statements.c. Evaluate the company's financial performance...
Practice Problem 1 The stockholders equity accounts of Bramble Corp. on January 1, 2017, were as follows. Preferred Stock (6%, $100 par noncumulative, 4,400 shares authorized) $264,000 Common Stock...
JVCU Which of the following is considered cash for financial reporting purposes? 1 JVCU Which of the following is considered cash for financial reporting purposes? 1
Required information The Foundational 15 [LO8-2, LO8-3, LO8-4, LO8-5, LO8-7, LO8-9, L08-10) (The following information applies to the questions displayed below.) Morganton Company makes one product...

For an investment to be classified as a current asset, a. The investment must be easily convertible

Question:

Step by Step Answer:

c Both a and b m...View the full answer

Financial Accounting

Students also viewed these Business questions