Question

Maturity period for a Short-term Investment from the date of its purchase to be considered as cash equivalents should be:

Options

• 3 months

• Less than 3 months

• 6 months

• 3 months or less than 3 months

Answer 1

3 months or less than 3 months

Explanation:

A short-term maturity period to be classified as cash equivalents, the investment should be 3 months or less from the date of acquisition.