Mend Co. purchased a 3-month U.S. Treasury bill. Mend’s policy is to treat as ca

Question

Mend Co. purchased a 3-month U.S. Treasury bill. Mend’s policy is to treat as cash equivalents all highly liquid investments with an original maturity of 3 months or less when purchased. How should this purchase be reported in Mend’s statement of cash flows? A. As an outflow from investing activities. B. As an outflow from financing activities. C. Not reported. D. As an outflow from operating activities. Mend Co. purchased a 3-month U.S. Treasury bill. Mend’s policy is to treat as cash equivalents all highly liquid investments with an original maturity of 3 months or less when purchased. How should this purchase be reported in Mend’s statement of cash flows? A. As an outflow from investing activities. B. As an outflow from financing activities. C. Not reported. D. As an outflow from operating activities.

Explanation / Answer

Option C is the correct answer -Not reported

since it is treated as cash equivalent if forms part of cash and hence the cash position does not change

Option C is the correct answer -Not reported

since it is treated as cash equivalent if forms part of cash and hence the cash position does not change

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