Temporary investments
A.are reported as current assets
B.include cash equivalents
C.do not include equity securities
D.all of the above
D.all of the above
The correct answer is:
D. all of the above.
Temporary investments are typically reported as current assets on a company's balance sheet. They often include cash equivalents, which are highly liquid and easily convertible to cash within a short period (typically within three months). Temporary investments do not include equity securities, which are long-term investments in company stocks or ownership interests.
To determine the correct answer, we can analyze each option and understand its accuracy.
A. Temporary investments are typically reported as current assets because they are expected to be converted into cash within a short period, usually one year or less. Therefore, option A is accurate.
B. Temporary investments often include cash equivalents, which are highly liquid assets that can be easily converted into cash. Cash equivalents are also considered as current assets. Hence, option B is correct.
C. Equity securities represent ownership stakes in a company, such as stocks or shares. Temporary investments can include equity securities, so option C is not accurate.
D. Since option C is not accurate, we cannot select option D as the correct answer. Therefore, the correct answer is options A and B.
In conclusion, temporary investments are reported as current assets, and they can include cash equivalents. However, they may or may not include equity securities.