Cash equivalents:
A)Include savings accounts.
B)Include checking accounts.
C)Are readily converted to a known cash amount.
D)Include time deposits.
E)Have no immediate value.

Question

Quizplus · Accepted Answer

Cash equivalents are short-term investments that can be easily and quickly converted into cash with little risk of a change in value. Examples of cash equivalents include Treasury bills, commercial paper, money market funds, and certificates of deposit (CDs), but not savings or checking accounts, which are classified as cash. Time deposits are also not considered cash equivalents because there is a penalty for withdrawing the funds before the maturity date.

Cash Equivalents