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- Cash equivalents are the total worth of cash on hand that includes similar goods to cash; cash and cash equivalents must be in the current assets section on the balance sheet. Because cash and cash equivalents are the most liquid assets, they are always listed on the top line of a company's balance sheet.
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short-term, highly liquid investments with original maturities of three months or less; Cash Equivalents consists of coins, currency, and bank deposits, as well as negotiable instruments, such as checks and money orders.
1. Which of the following is true about a cash equivalent? 2. A cash equivalent can be defined as a liquid investment that can be converted into cash ______________. 3. Although a cash flow statement is a detail of cash movement through a company, it also includes ___________. 4.
Cash equivalents are short term and highly liquid investments that are readily convertible into cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Short-term. Highly liquid. Acquired 3 months before maturity date. Notable aspects of cash equivalents.
CHAPTER 7 TEST 1.)cash equivalents are the most liquid of all assets. true 2.)internal control will aid in achieving accurate accounting for cash transactions.
May 18, 2023 · Cash and cash equivalents are highly liquid assets that can be readily converted into cash. They typically include cash on hand, demand deposits, and short-term investments with maturities of three months or less.
Cash equivalents are short-term, highly liquid assets that can readily be converted into known amounts of cash and with little risk of price fluctuations. An example of a short- term cash equivalent asset would be one that matures in three months or less from the acquisition date.
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May 31, 2024 · Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.
