[scestone]

So I’m going through my FAR final review and I noticed that while doing practice MCQs instruments with maturities over 3 months when purchased are still classified as an equivalent if they are maturing within the next 3 months. For example a 3 year bonds that is maturing in 2 months is an equivalent for governmental units, this would not be the case for a corporation. Cash Equivalents for corps must have an original maturity under 3 months. Is this correct? Thank you

REG - 95
FAR - 96
BEC - 92
AUD - 99

[scestone]

hoping someone can help me out on this one

REG - 95
FAR - 96
BEC - 92
AUD - 99

[Futile]

It is the same for both. It depends on the policy of the entity.

Instruments with original maturities of ≤ 3 months and those purchased with remaining maturities of ≤ 3 months can be Cash & Cash Equivalents.

CPA exam: Done!

Thank You, Lord.

[Author]

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