Asked by Khristy Ramirez on May 23, 2024
Verified
Which is classified as a long-term investment?
A) bond issue costs
B) cash surrender value of life insurance
C) capital lease
D) three-year prepaid insurance policy
Long-Term Investment
Investments in securities or assets intended to be held for several years or more to generate long-term returns.
Cash Surrender Value
Cash surrender value is the amount of cash that a life insurance policyholder can receive upon the cancellation of their policy before its maturity or the insured event.
Capital Lease
A lease agreement considered to have the economic characteristics of asset ownership, thus it is recorded as an asset and liability on the balance sheet.
- Differentiate between short-term investments and long-term investments.
Verified Answer
Learning Objectives
- Differentiate between short-term investments and long-term investments.
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