Asked by David Lindsey on Jul 15, 2024
Verified
To be classified as a short-term investment the investment must be readily marketable and intended to be converted into cash within the next year or operating cycle.
Short-Term Investment
Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle.
Readily Marketable
Assets that can be sold quickly and with minimal impact on their price due to their appeal to a wide range of buyers.
Operating Cycle
The average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.
- Learn the significance of marketability and intent on the classification of investments as short-term or long-term.
Verified Answer
Learning Objectives
- Learn the significance of marketability and intent on the classification of investments as short-term or long-term.
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