Question

Investments in stock and debt securities of other corporations are included as _____ if the company has the ability and intent to sell them within the next 12 months.

1) current assets
2) long-term assets
3) current liabilities
4) long-term liabilities

Answer 1

Investments in stock and debt securities intended to be sold within a year are classified as current assets, and businesses must wisely choose their financial capital strategies. The correct answer is option 1).

Step-by-step explanation:

Investments in stock and debt securities of other corporations are included as current assets if the company has the ability and intent to sell them within the next 12 months. When deciding on sources of financial capital, business owners can consider early-stage investors, reinvesting profits, borrowing through banks or bonds, and selling stock.

Each option carries different implications for control and financial obligations. Investments in stock and debt securities of other corporations are included as current assets if the company has the ability and intent to sell them within the next 12 months.

For instance, real-time selling of stocks may attract investors looking for potential capital gains within a short period, versus a long-term strategy involving stocks or bonds for extended periods. Proper investment strategies are vital for the health and expansion of a business.