Which statement is correct?
A)An investment in a security at FVPL must be classified as a cash equivalent.
B)An investment in a security at amortized cost must be classified as cash equivalent.
C)An investment in a security held to meet short-term cash commitments must be classified as a cash equivalent .
D)An investment in a security at FVOCI must be classified as a cash equivalent.

Question

Quizplus · Accepted Answer

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and so close to their maturity that they present insignificant risk of changes in value due to changes in interest rates. Statement C correctly identifies investments held to meet short-term cash commitments as cash equivalents, aligning with this definition.

Which Statement Is Correct