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Question
Which of the following is not included in cash and cash equivalents?
(a) Balances with banks
(b) Bank deposits with 100 days of maturity
(c) Cheques and drafts on hand and
(d) Cash on hand
Solution
An investment normally qualifies as cash and cash equivalents only if it has maturity period of three months. Thus, 'Bank deposits with 100 days of maturity will not be included in cash and cash equivalents.
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Application in Generating Accounting Information - Bank Reconciliation Statement
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