In terms of the statement of cash flows, cash includes actual cash items minus certain cash equivalents such as commercial paper, money market funds, and treasury bills.

Question

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Cash and cash equivalents on the statement of cash flows include actual cash on hand as well as certain cash equivalents like commercial paper, money market funds, and treasury bills, not minus them. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash.

In Terms of the Statement of Cash Flows, Cash Includes