What dollar amount will be included in "cash and cash equivalents"? $$\begin{array} { | l | r | }
\hline \text { Investment in shares of a public company } & \$ 11,000 \
\hline \text { Investment in a money market fund } & 8,000 \
\hline \text { Cash restricted for plant expansion } & 1,000 \
\hline \text { Three-month term deposits } & 2,000 \
\hline
\end{array}$$

Question

What dollar amount will be included in "cash and cash equivalents"? $$\begin{array} { | l | r | } 
\hline \text { Investment in shares of a public company } & \$ 11,000 \
\hline \text { Investment in a money market fund } & 8,000 \
\hline \text { Cash restricted for plant expansion } & 1,000 \
\hline \text { Three-month term deposits } & 2,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Cash and cash equivalents refer to assets that are readily convertible to cash. This includes cash on hand, savings accounts, money market funds, and short-term investments. As such, the cash and cash equivalents dollar amount would include the investment in the money market fund ($8,000) and the three-month term deposits ($2,000), giving a total of $10,000. The investment in shares of a public company and the cash restricted for plant expansion are not as readily convertible to cash and are therefore not included in this category.

What Dollar Amount Will Be Included in "Cash and Cash