Near money is an easily convertible asset, such as a marketable security or an account receivable, that is considered a current asset as it is expected to be converted into cash within the next year. Other types of assets include fixed assets, used in the operation of a business, and intangible assets, which are nonphysical assets that can be converted to cash. Effective asset management is important for individuals and businesses to ensure financial stability and success.
Near money, also known as liquid assets or quick assets, includes assets like marketable securities, notes, and accounts receivable that can be readily converted into cash. These assets are considered current assets as they are expected to be converted into cash within the next 12 months or the normal operating cycle of a business. Examples of near money include marketable securities, money market accounts, certificates of deposit (CDs), treasury bills, and accounts receivable. These examples demonstrate how near money can be easily converted into cash, such as selling marketable securities or collecting accounts receivable. Near money is important for businesses as it provides them with the flexibility to meet their short-term financial obligations.
Near money refers to financial assets that are easily convertible into cash, such as savings accounts, money market accounts, and certificates of deposit.
No, near money is not considered a type of currency. It is a type of financial asset that can be easily converted into cash.
While near money assets are generally considered low-risk investments, there is still some risk involved. For example, if interest rates rise, the value of near money assets may decrease.
Yes, near money assets can be used as collateral for loans. This is because they are easily convertible into cash.
Yes, there may be tax implications associated with investing in near money assets. For example, interest earned on savings accounts and certificates of deposit is generally taxable.
Yes, near money assets can be inherited. They are considered part of a person’s estate and can be passed on to heirs.
There may be restrictions on withdrawing money from certain types of near money accounts, such as certificates of deposit. These restrictions are typically outlined in the account agreement.
No, near money assets cannot be traded on the stock market. They are not considered securities.
There may be fees associated with investing in certain types of near money assets, such as money market accounts. These fees are typically outlined in the account agreement.
The right near money asset for your investment portfolio will depend on your individual financial goals and risk tolerance. It is important to do your research and consult with a financial advisor before making any investment decisions.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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