Which Statement About "Cash and Cash Equivalents" Is Correct

question 50

Multiple Choice

Which statement about "cash and cash equivalents" is correct?

• A)Exchanges of "cash and cash equivalents" for items that are not "cash and cash equivalents" result in cash flows for the cash flow statement.
• B)Changes in the composition of "cash and cash equivalents" is considered a cash flow for purposes of the cash flow statement.
• C)Changes in the composition of "cash and cash equivalents" is considered an operating activity on the cash flow statement.
• D)Cash equivalents include investment in long-term bonds.

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Definitions:

Personal Property

Movable assets or belongings, excluding real estate and buildings, owned by an individual or entity.

Third Parties

Individuals or entities that are not directly involved in a contract or negotiation but may be affected by its outcomes or have an interest in its terms.

Indispensable Paper

A critical document without which a particular process or task cannot be completed or understood.

Chattel Paper

A legal document that specifies an obligation involving movable personal property, often related to leases or loans.