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What is included in cash and cash equivalents?

Author:
Harold Averkamp, CPA, MBA

Examples of Cash

In accounting, a company’s cash includes the following:

Definition of Cash Equivalents

Cash equivalents are short-term, highly liquid investments with a maturity date that was 3 months or less at the time of purchase. In other words, there is very little risk of collecting the full amount being reported.

Examples of Cash Equivalents

Examples of cash equivalents include:

  • money market accounts
  • U.S. Treasury Bills
  • commercial paper

Typically, the combined amount of cash and cash equivalents will be reported on the balance sheet as the first item in the section with the heading current assets.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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