Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following statements about cash equivalents is FALSE?

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash.

Cash equivalents typically have original maturities of three months or less.

Treasury bills maturing in two months are classified as cash equivalents.

Accounts receivable are considered cash equivalents.

Previous problemNext problem

Verified step by step guidance

Understand the definition of cash equivalents: Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

Review examples of cash equivalents: Common examples include Treasury bills, money market funds, and commercial paper, provided they meet the criteria of being highly liquid and having short maturities.

Analyze the statement 'Accounts receivable are considered cash equivalents': Accounts receivable represent amounts owed by customers and are not classified as cash equivalents because they are not highly liquid investments and cannot be readily converted to cash within three months.

Compare the other statements provided: Verify that Treasury bills maturing in two months meet the criteria for cash equivalents, and confirm that the definition of cash equivalents aligns with the first two statements.

Conclude that the false statement is 'Accounts receivable are considered cash equivalents,' as accounts receivable do not meet the criteria for classification as cash equivalents.