The Statement of Cash Flows Must Be Prepared on a Cash

question 58

Essay

The Statement of Cash Flows must be prepared on a cash and cash equivalents basis.
Instructions
a) Define a cash equivalent for purposes of the Statement of Cash Flows and provide two examples.
b) Explain why cash and cash equivalents are combined for purposes of preparing the Statement of Cash Flows even though cash equivalents are not really cash.

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Definitions:

Social Learning

Social learning is a theory that suggests people can learn new behaviors and information by observing others.

Conditioned Stimulus

A formerly neutral signal that, once paired with an unconditioned stimulus, begins to elicit a conditioned reaction.

Unconditioned Stimulus

In classical conditioning, it is a stimulus that naturally and automatically triggers a response without any prior learning.

Conditioned Response

A learned reaction to a previously neutral stimulus that has been repeatedly paired with an unconditioned stimulus causing an automatic response.