How are cash equivalents treated on a statement of cash flows?
A) They are disclosed in the operating activities section.
B) They are combined with the Cash account.
C) They are disclosed in either the investing or financing activities section.
D) They are excluded from the statement of cash flows.

Question

Quizplus · Accepted Answer

Cash equivalents are combined with the Cash account on the statement of cash flows because they are short-term, highly liquid investments that are readily convertible to known amounts of cash.

How Are Cash Equivalents Treated on a Statement of Cash