How should a company determine how to classify money market funds?

Select answer from the options below

Determine if the fund is a negotiable instrument, because then it would be short$-$term paper. Otherwise, it can be considered cash.

Determine if the fund will be used to meet current operating expenses, because that would allow them to be considered cash. Otherwise, the appropriate classification would be as future operating income.

Determine if the fund balances are greater than the normal amounts of petty cash. If they are less, then report them as cash; if they are greater, report them an investment.

Determine if the fund has check writing privileges, because that would allow enough liquidity to be considered cash. Otherwise, the appropriate classification would be as a cash equivalent or temporary investment depending on whether any restriction on conversion to cash exists.

Answer rating: 100% (QA)

The most appropriate way for a company to classify money market funds is to Determine if the fund ha... View the full answer