Chapter 15 - Investments and International Operations Flashcards

1
Q

short term investment

A
  • securities that
    (1) management intends to convert to cash within one year of the operating cycle, whichever is longer
    (2) are readily convertible to cash
  • are reported under current assets and serve a purpose similar to cash equivalents
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2
Q

long term investments

A
  • securities that are not readily convertible to cash or are not intended to be converted into cash in the short term
  • can also include funds earmarked for a special purpose, such as bond sinking funds and investments in land or other assets not used in the company’s operations
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