FUND.ACCT.PRIN.
FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
Question
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Chapter 15, Problem 1QS
To determine

Concept Introduction:

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To Identify:

The statements which are true about the long term investments

Expert Solution & Answer
Check Mark

Answer to Problem 1QS

The statements which are true about the long term investments are as follows:

    StatementExplanationTrue or False for Long term Investments
    b.
    Long term investment includes non operating assets like investment in land. Hence this statement is True.
    TRUE
    d.
    Long term investments are reported under the Non Current assets of the balance sheet. Hence this statement is True.
    TRUE
    f.
    Long term investments include bonds and stocks not intended to be sold in near future. Hence this statement is True.
    TRUE

Explanation of Solution

The statements about the long term investments are explained as follows:

    StatementTrue or False for Long term Investments
    a.
    Long term investments are never considered as Cash equivalents. Hence this statement is False.
    FALSE
    b.
    Long term investment includes non operating assets like investment in land. Hence this statement is True.
    TRUE
    c.
    Long term investments include investments that will mature after 12 months. Hence this statement is False.
    FALSE
    d.
    Long term investments are reported under the Non Current assets of the balance sheet. Hence this statement is True.
    TRUE
    e.
    Long term investments are not easily marketable. Hence this statement is False.
    FALSE
    f.
    Long term investments include bonds and stocks not intended to be sold in near future. Hence this statement is True.
    TRUE

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