Which of the Following Concepts of Cash Is Not Appropriate

question 154

Multiple Choice

Which of the following concepts of cash is not appropriate to use in preparing the statement of cash flows?

• A) cash
• B) cash and money market funds
• C) cash and cash equivalents
• D) cash and U.S. treasury bonds

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Definitions:

Payback Period

The time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment itself.

Straight-line Basis

Straight-line basis is a method of calculating depreciation and amortization, wherein an asset's cost is evenly spread over its useful life.

Cash Flow

A measurement of the net amount of cash and cash-equivalents being transferred into and out of a business.

Incremental Cost Approach

A decision-making process that focuses on the changes in total cost that would result from a decision to pursue one alternative over another.