Cash, Cash Equivalents, Balance Sheet

Question 0

What is a current liability?

Answer 0

Liabilities that will be settled in less than a year or operating cycle

Question 1

What are current assets?

Answer 1

Assets used up or converted to cash within one year or operating cycle

Question 2

What are two characteristics of cash equivalents?

Answer 2

1. Easily convertible to cash

2. Original maturity of 3 months or less from date of purchase

Question 3

What are some examples of cash equivalents?

Answer 3

Coins
Money market
Unmailed checks
Savings accounts
CDs with original maturity 3 months or less
Negotiable paper like checks, travelers checks, money orders

Question 4

Can long term debt be listed under current liabilities? If so, why?

Answer 4

Yes

For the current portion that is due for capital lease, notes, and loans