Accounting!!!?

Question

What are cash equivalents? How are purchases and sales of cash equivalents reported on the statement of cash flows?

Answer 1

IAS 7 defines cash and cash equivalents as follows:

Cash comprises cash on hand and demand deposits.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

The cash flow statement ends with cash generated in the year, added to CCE at beginning of yr to give you CCE at end of yr.

Scroll to the end of the link to look at the 2 formats of the cash flow statement : direct and indirect.