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    Question

    According to AS 3, "Cash Equivalents"

    are:
    A Long-term investments in equity shares. Correct Answer Incorrect Answer
    B Fixed assets that can be sold quickly. Correct Answer Incorrect Answer
    C Short-term, highly liquid investments readily convertible to known amounts of cash. Correct Answer Incorrect Answer
    D All current assets except inventory. Correct Answer Incorrect Answer
    E Only cash in hand. Correct Answer Incorrect Answer

    Solution

    Cash equivalents typically have a short maturity, such as three months or less from the date of acquisition.

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