Commercial paper shows up either as a current asset or a current liability on the corporate balance sheet. Introduction: Commercial paper: It is a short-term debt instrument, which is issued by one corporation to another for the exchange of inventories or any accounts payable that the issuing company owes to the issued company. Itâ€™s a risky instrument as it is not backed up by any sort collateral and is not registered under Security and Exchange Commission, until it is issued under 270 days. Current assets: These are assets which can be converted into cash & cash equivalents within a financial year. Current liability: Current liabilities are liabilities which are obligated to be paid off within a financial year by the company.

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Chapter 8, Problem 7DQ

Summary Introduction

To explain: Commercial paper shows up either as a current asset or a current liability on the corporate balance sheet.

Introduction:

Commercial paper:

It is a short-term debt instrument, which is issued by one corporation to another for the exchange of inventories or any accounts payable that the issuing company owes to the issued company. Itâ€™s a risky instrument as it is not backed up by any sort collateral and is not registered under Security and Exchange Commission, until it is issued under 270 days.

Current assets:

These are assets which can be converted into cash & cash equivalents within a financial year.

Current liability:

Current liabilities are liabilities which are obligated to be paid off within a financial year by the company.

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