are money orders cash equivalents
Cash and cash equivalents are not just the amount of currency that a business has in its cash registers and bank accounts; they also include several different types of financial instruments. Cash equivalents include all undeposited negotiable instruments (such as checks), bank drafts, money orders and certain certificates of deposit. A certificate of deposit, or CD, is a financial product offered by banks to their customers. By Ciaran John. Banks treat money orders as cash equivalents because, under federal banking laws, money orders are next-day availability items and not subject to deposit holds. When you buy a money order, you must buy it with cash or electronic funds, but you typically cannot get a refund if you decide not to use it. Cash and cash equivalents. Cash and Cash Equivalents are recorded as current assets. Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet. Cash equivalents are short-term commitments with temporarily idle cash and easily convertible into a known cash amount. Cash also includes instruments or contracts that can be deposited in a bank account like vendee checks, customer checks, cashier's checks, certified checks, as well as money orders. The cash account, like all asset accounts, is a debit account. Included in cash:  Coins and bills in legal tender by BSP  Checks (subject to certain conditions)  Bank drafts  Money orders Types of checks:  Post-dated checks (checks dated on future date) – not part of cash and cash equivalents because they are not yet accepted by the bank for deposit and immediate encashment. Cash and cash equivalents. Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet. Cash equivalents are short-term commitments with temporarily idle cash and easily convertible into a known cash amount. Review Module 1 P.M.G. Clamor Cash and Cash Equivalents August 24, 2011 1 Cash – includes money and any other negotiable instrument that is payable in money and acceptable by the bank for deposit and immediate credit. Generally, the lender will subtract a fee from the face value of the invoices that will be in the range of three to five percent. Around the home, cash equivalents may include several other financial instruments, like checks or money orders that are awaiting deposit or redemption. Gift certificates also qualify. A cash equivalent is a safe investment that carries such a low amount of risk that the outcome is virtually ensured. There are a number of different types of investments that may be properly identified as cash equivalents. Cash Equivalents. any investment that (1) is readily convertible into cash and (2) has an original maturity of at least 3 months or less. (examples: money market accounts, treasury bills, certificates of deposit, commercial paper) Cash.
Yes, Banks treat money orders as cash equivalents because, under federal banking laws, money orders are next-day availability items and not subject to deposit holds.