D is corrent. The definition of cash includes both cash (cash on hand and demand deposits) and cash equivalents (short-term, highly liquid investments). Cash equivalents have to be readily convertible into cash and so near maturity that they carry little risk of changing in value due to interest rate changes. This will include only those investments with original maturities of three months or less from the date of purchase by the enterprise. Common examples of cash equivalents include treasury bills, commercial paper, and money market funds. Forder should report a total of $460,000 ($45,000 + $65,000 + $350,000) on its December 31, year 2 balance sheet. The US Treasury bill purchased on 12/1/Y2 is not included in the calculation because its original maturity is not within three months or less from the date of purchase.
A is incorrect. The definition of cash includes both cash (cash on hand and demand deposits) and cash equivalents (short-term, highly liquid investments). Cash equivalents have to be readily convertible into cash and so near maturity that they carry little risk of changing in value due to interest rate changes. This will include only those investments with original maturities of three months or less from the date of purchase by the enterprise. Common examples of cash equivalents include treasury bills, commercial paper, and money market funds. Forder should report a total of $460,000 ($45,000 + $65,000 + $350,000) on its December 31, year 2 balance sheet. The US Treasury bill purchased on 12/1/Y2 is not included in the calculation because its original maturity is not within three months or less from the date of purchase.
A is incorrect. The definition of cash includes both cash (cash on hand and demand deposits) and cash equivalents (short-term, highly liquid investments). Cash equivalents have to be readily convertible into cash and so near maturity that they carry little risk of changing in value due to interest rate changes. This will include only those investments with original maturities of three months or less from the date of purchase by the enterprise. Common examples of cash equivalents include treasury bills, commercial paper, and money market funds. Forder should report a total of $460,000 ($45,000 + $65,000 + $350,000) on its December 31, year 2 balance sheet. The US Treasury bill purchased on 12/1/Y2 is not included in the calculation because its original maturity is not within three months or less from the date of purchase.
A is incorrect. The definition of cash includes both cash (cash on hand and demand deposits) and cash equivalents (short-term, highly liquid investments). Cash equivalents have to be readily convertible into cash and so near maturity that they carry little risk of changing in value due to interest rate changes. This will include only those investments with original maturities of three months or less from the date of purchase by the enterprise. Common examples of cash equivalents include treasury bills, commercial paper, and money market funds. Forder should report a total of $460,000 ($45,000 + $65,000 + $350,000) on its December 31, year 2 balance sheet. The US Treasury bill purchased on 12/1/Y2 is not included in the calculation because its original maturity is not within three months or less from the date of purchase.
