Which of the following is not a cash equivalent for purposes of preparing a statement of cash flows?
A) Investment in common stock of other companies
B) Investment in Treasury bills
C) Investment in a money market fund
D) Investment in commercial paper

Question

Quizplus · Accepted Answer

Investment in common stock of other companies is not considered a cash equivalent because it does not have the same liquidity and low risk of changes in value as the other options. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and so close to their maturity that they present insignificant risk of changes in value due to changes in interest rates.

Which of the Following Is Not a Cash Equivalent for Purposes