Question

Debt securities reflect a creditor relationship and include investments in notes, bonds, and certificates of deposit. Equity securities reflect an owner relationship and include shares of stock issued by other companies. Short-term investments in securities are current assets that meet two criteria: (1) They are expected to be converted into cash within one year and (2) they are readily convertible to cash, or marketable. All other investments in securities are long term. Long-term investments also include assets not used in operations and those held for special purposes, such as land for expansion. Investments in securities are classified into one of six groups. Match each type of investment with its definition by selecting the correct term from the drop down list.

Answer 1

Answer:

1. Debt securities reflect a creditor relationship and include investments in notes, bonds, and certificates of deposit.

Explanation:

1. Debt securities reflect a creditor relationship and include investments in notes, bonds, and certificates of deposit.

2. Equity securities reflect an owner relationship and include shares of stock issued by other companies.

3. Short-term investments in securities are current assets that meet two criteria: (1) They are expected to be converted into cash within one year and (2) they are readily convertible to cash, or marketable.

4. Long-term investments also include assets not used in operations and those held for special purposes, such as land for expansion.