To be classified as a cash equivalent,the only criterion an item must meet is that it must be readily convertible to a liquid asset.

Question

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To be classified as a cash equivalent, an item must not only be readily convertible to a known amount of cash but also be subject to an insignificant risk of changes in value, and it must be close to its maturity (typically within three months of the purchase date).

To Be Classified as a Cash Equivalent,the Only Criterion an Item