The Statement of Cash Flows must be prepared on a cash and cash equivalents basis.
Instructions
a) Define a cash equivalent for purposes of the Statement of Cash Flows and provide two examples.
b) Explain why cash and cash equivalents are combined for purposes of preparing the Statement of Cash Flows even though cash equivalents are not really cash.

Question

Quizplus · Accepted Answer

The Answer of The Statement of Cash Flows must be prepared on a cash and cash equivalents basis.
Instructions
a) Define a cash equivalent for purposes of the Statement of Cash Flows and provide two examples.
b) Explain why cash and cash equivalents are combined for purposes of preparing the Statement of Cash Flows even though cash equivalents are not really cash.

The Statement of Cash Flows Must Be Prepared on a Cash