What dollar amount will be included in "cash and cash equivalents"? $$\begin{array} { | l | r | }
\text { Treasury bills maturing in } 30 \text { days } & \$ 12,000 \
\hline \text { Investment in a money market fund } & 8,000 \
\hline \text { Cash on hand } & 1,000 \
\hline \text { Postage stamps } & 1,000 \
\hline
\end{array}$$

Question

What dollar amount will be included in "cash and cash equivalents"? $$\begin{array} { | l | r | } 
\text { Treasury bills maturing in } 30 \text { days } & \$ 12,000 \
\hline \text { Investment in a money market fund } & 8,000 \
\hline \text { Cash on hand } & 1,000 \
\hline \text { Postage stamps } & 1,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Treasury bills maturing in 30 days ($12,000), investment in a money market fund ($8,000), and cash on hand ($1,000) are all considered cash equivalents because they are highly liquid investments that are easily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Postage stamps, however, are not considered cash equivalents because they are not a form of currency nor are they easily convertible to a known amount of cash. Therefore, the total amount included in "cash and cash equivalents" is $12,000 + $8,000 + $1,000 = $21,000.

What Dollar Amount Will Be Included in "Cash and Cash