Bay Co. purchased a 3-month U.S. Treasury bill. In preparing Bay's statement of cash flows, this purchase would
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A. B. C. D. E.A
The T-bill is a cash equivalent and has no effect on the statement of cash flows. Cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturities that they present insignificant risk of changes in value because of the changes in interest rates.
They only include investments with original maturities to the holder of 3 months or less.