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Is money market funds cash equivalent?
Yes. Since the Fund meets the definition of a money market fund under the Act, the Fund may be classified as a cash equivalent in Company X's statement of cash flows. FASB Statement No. 95, Statement of Cash Flows ("FAS 95"), par. 9, indicates that items commonly considered cash equivalents include treasury bills, commercial paper, and money market funds. Although FAS 95 does not include the definition of what constitutes a money market fund, we believe it is appropriate for a money market fund that meets all of the qualifying criteria for a money market fund under the Act to be classified as a cash equivalent in the statement of cash flows. However, If the Fund does not meet all of the qualifying criteria for a money market fund under the Act, Company X should compare the attributes of the investments made by the Fund, such as credit quality and maturity, and the weighted average maturity of the Fund's investments to the requirements for an SEC registered money market fund in order to determine if classification of its investment as a cash equivalent is appropriate. FAS 95, par. 8, states that: "...cash equivalents are short-term, highly liquid investments that are both a. Readily convertible to known amounts of cash b. So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition." I think that if (1) the Fund's policies include a provision that requires the weighted average maturity of the Fund's securities holdings not to exceed 90 days, (2) Company X has the ability to redeem the Fund's shares daily in accordance with its cash-management policy, and (3) the Fund's investment attributes are consistent with the investment attributes of an SEC registered money market fund and the definition of cash equivalents in FAS 95, it would be appropriate for Company X's investment in the fund to be classified as a cash equivalent in its statement of cash flows.
What is meant by the term financial resources?
The term financial resources means the money (cash, cash equivalents, and credit) and other valuable property that you own that you can use to do things that require money be paid.
Are money market saving certificate considered cash?
yes
What are cash trading advantages?
you get a certain profit as an agent , else you get the money from fluctuations in global market and respective currencies
How does the risk of a money market mutual fund compare with that of a savings account?
The risk of a money market mutual fund is similar to that of a savings account. Both are low-risk, slow-growth savings vehicles. Money market funds are viewed as a cash equivalent, similar to a savings account.
Why is the cash flow statement useful also how do cash equivalent effect the cash flow statement?
The Cash Flow statement is essential because it shows how efficiently the company is spending its money, and where are they making money from. Cash equivalents are assets that can convert into cash within a short period of time. Short term investments (can go into operating, but more so in investing) and accounts receivables (operating) are good examples of cash equivalents because you are expected to receive money within the year. Ideally, you will want to see cash in accounts receivables within 30 days and ST investments within a few months. Neither of these are shown as cash equivalents in the 3 activities Cash equivalents will also be shown when finding the net change of "cash and cash equivalents".
Is Petty cash is cash and cash equivalents?
yes, of course
Is money market funds cash equivalent?
Yes. Since the Fund meets the definition of a money market fund under the Act, the Fund may be classified as a cash equivalent in Company X's statement of cash flows. FASB Statement No. 95, Statement of Cash Flows ("FAS 95"), par. 9, indicates that items commonly considered cash equivalents include treasury bills, commercial paper, and money market funds. Although FAS 95 does not include the definition of what constitutes a money market fund, we believe it is appropriate for a money market fund that meets all of the qualifying criteria for a money market fund under the Act to be classified as a cash equivalent in the statement of cash flows. However, If the Fund does not meet all of the qualifying criteria for a money market fund under the Act, Company X should compare the attributes of the investments made by the Fund, such as credit quality and maturity, and the weighted average maturity of the Fund's investments to the requirements for an SEC registered money market fund in order to determine if classification of its investment as a cash equivalent is appropriate. FAS 95, par. 8, states that: "...cash equivalents are short-term, highly liquid investments that are both a. Readily convertible to known amounts of cash b. So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition." I think that if (1) the Fund's policies include a provision that requires the weighted average maturity of the Fund's securities holdings not to exceed 90 days, (2) Company X has the ability to redeem the Fund's shares daily in accordance with its cash-management policy, and (3) the Fund's investment attributes are consistent with the investment attributes of an SEC registered money market fund and the definition of cash equivalents in FAS 95, it would be appropriate for Company X's investment in the fund to be classified as a cash equivalent in its statement of cash flows.
What is meant by the term financial resources?
The term financial resources means the money (cash, cash equivalents, and credit) and other valuable property that you own that you can use to do things that require money be paid.
Are money market saving certificate considered cash?
yes
What is the aim behind a cash flow note?
The aim of a cash flow note aka cash flow statement is to show how changes in income and balance sheets affect cash and/or cash equivalents. This gives an indication of how much money is flowing in and out of the company or household.
What are the major characteristics of money market instruments?
1. Money market generates higher rate of returns than holding cash. 2. Money Market funds are liquid 3. low risk The three fundamental characteristics of money market instruments are: (a) low default risk, (b) short-term to maturity, and (c) high marketability. These characteristics give money market instruments their characteristic of being low risk. Money market investors demand low-risk securities because their cash excesses are only temporary.
What has the author Robin Grieves written?
Robin Grieves has written: 'Cash management' -- subject(s): Cash management, Money market funds
Cash and cash equivalents will be converted to cash in how many days?
GET PAID CASH FOR THE PURCHASES YOU MAKE AND THE DEALS YOU PROMOTE! cutt.ly/EjvGqAC
What accounts are affected when recording cash received from clients for fees earned?
Debit Cash and cash equivalents. Credit Revenues or Sales.
What is contemporary account?
successful operations are based on an organisations ability to adapt to change. valuations based on exit price=net selling price in an orderly market (current cash equivalents )
What are the 5 cash management tools?
The five cash management tools are: checking accounts, savings accounts, CD's, bonds, and money market accounts.
