The following accounts are listed in a company€™s general ledger:

Required
1. Which items are cash equivalents?
2. Explain where items that are not cash equivalents should be classified on the balance sheet.
3. What are the amount and the direction of change in cash and cash equivalents for 2010? Is the company as liquid at the end of 2010 as it was at the end of 2009? Explain your answer.

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December 31, 2010 December 31, 2009 Accounts Receivable Certificates of Deposit (three months) Marketable Securities Petty Cash Fund Money Market Fund Cash in Checking Account $12,300 10,000 4,500 1,200 25,800 6,000 $10,000 10,000 4,000 1,500 28,000 6,000