Short-term investments:
A)Are securities that management intends to convert to cash within one year or an operating cycle,whichever is longer.
B)Include funds earmarked for a special purpose such as bond sinking funds.
C)Include stocks not intended to be converted into cash.
D)Include bonds not intended to be converted into cash.
E)Include sinking funds not intended to be converted into cash.

Question

Quizplus · Accepted Answer

Short-term investments are securities that a company intends to convert to cash within one year or an operating cycle (whichever is longer). This definition excludes investments that are intended to be held for longer periods, such as sinking funds or stocks that are not intended to be sold. Therefore, choice A accurately describes short-term investments.

Short-Term Investments