Where are Short-term Investments found on the Balance Sheet? 1 pointCurrent LiabilitiesCurrent AssetsNoncurrent AssetsNoncurrent Liabilities
Question
Where are Short-term Investments found on the Balance Sheet?
- Current Liabilities
- Current Assets
- Noncurrent Assets
- Noncurrent Liabilities
Solution
Answer Breakdown
Short-term investments are often classified on the balance sheet based on their liquidity and the time frame in which they are expected to be converted to cash.
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Current Assets: Short-term investments are typically classified as current assets. This is because they are intended to be converted to cash or used up within one year, making them readily available for the company’s operational needs.
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Other Classifications:
- Current Liabilities: These are obligations the company needs to settle within a year and would not include investments.
- Noncurrent Assets: These represent long-term investments or property, plant, and equipment that are not intended for conversion to cash within a year.
- Noncurrent Liabilities: These are long-term financial obligations that are not due within the next year, which again would not include any form of investment.
Final Answer
Short-term investments are found under Current Assets on the balance sheet.
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