Which of the following is an example of a cash equivalent?

Short-term government securities are indeed classified as cash equivalents. Cash equivalents are financial instruments that are readily convertible to known amounts of cash with an insignificant risk of changes in value. They are typically short-term investments that have high liquidity and are easily accessible when cash is needed.

Short-term government securities, such as Treasury bills, fit this definition perfectly. These instruments are issued by the government and have maturities of generally less than three months. Their stability and high liquidity make them a safe and desirable choice for holding cash equivalents.

In contrast, company stock with a long-term holding period does not qualify as a cash equivalent because it can be subject to price fluctuations and is not as easily convertible to cash. Similarly, real estate assets owned by the company are not easily liquidated and represent long-term investments rather than cash equivalents. Non-liquid assets held for production similarly do not meet the criteria due to their purpose being tied to operational use rather than immediate cash accessibility.