Cash and Cash Equivalents Homework Help

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Here is what to know about Cash and Cash Equivalents

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Cash and Cash Equivalents

Basically, Cash and Cash Equivalents are assets that can be converted into cash. Cash equivalent are also perceived as liquid short-term investments that can be readily converted into cash.

  • Cash – cash is actual money in the form of currency, and this includes coins and notes. Enterprises holding these coins and notes come under the term ‘cash.’ Some examples of cash include cash in savings account, cash in checking account, petty cash, money orders, and bank drafts.
  • Cash Equivalents – as the name suggests, cash equivalents are investments which can be converted into cash. This investment should be of a short time to qualify as a cash

These investments should also be highly liquid. The investment should be such that it can be easily sold in the markets.

One governing factor is that the investment should have a sensical market value which should not be subject to significant change.

There should be no risks involved regarding the change in the values.

Some example of cash equivalents includes commercial paper, Treasury bill, money marketing funds, marketable securities and short-term government bonds. All these factors and more will be provided us to you in our Cash and Cash Equivalents homework help.

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