Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 7 - Cash and Receivables - Questions - Page 4004: 2c

Answer

Temporary investment account

Work Step by Step

Certificate of deposit is affiliated with time deposits made to banks or other similar financial institutions and is issued by the bank to the person depositing. The deposit is made with the intention to generate returns at a specific rate, and the certificate is therefore classified as a temporary investment and included in the temporary investment account.
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