State the meaning of the terms: (i) Cash Equivalents, (ii) Cash flows

Explanation

Cash equivalents ar short term, extremely liquid investments that ar simply convertible into money associate degreed that ar subject to an insignificant risk of modification in worth. In alternative words, money equivalents ar command for the aim of meeting short term money commitments instead of for investment or the other purpose. associate degree investment command for short-run maturity, say 3 months are often thought to be debt instrument. Some samples of money equivalents ar treasury bills, industrial papers, etc.

On the opposite hand, money flows ar inflows and outflows {of money|of money} and cash equivalents. A money flow ends up in increase within the total money balance and a money outflow ends up in decrease within the total money balance.