Which of the following items can be included as cash equivalents on the balance sheet?

Question

Quizplus · Accepted Answer

Cash equivalents are highly liquid investments that can be easily converted into cash and have a maturity of three months or less at the time of purchase. Short-term investments, such as money market funds, Treasury bills, and commercial paper, meet these criteria and are therefore considered cash equivalents. Prepaid expenses, inventory, and accounts receivable do not meet the criteria to be considered cash equivalents.

Which of the Following Items Can Be Included as Cash