Question
Which of the following does not qualify as a cash equivalent under AS 3?
Solution
cash equivalents are defined as: “Short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.”  “Bank overdrafts are generally considered a part of financing activities, unless they are repayable on demand and are an integral part of an enterprise’s cash management — in which case, they can be included in cash and cash equivalents.”
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