Which of the following item is not considered as cash and cash equiva…

The correct answer is Option (4) → Bills of Exchange

Cash equivalents are short-term, highly liquid investments that can be readily converted into a known amount of cash with an insignificant risk of change in value. A bill of exchange receivable is a trade receivable arising from credit sales, not an investment, so it is not a cash equivalent; the book shows bills receivable under trade receivables.

Option (1) Treasury Bills — A true statement. Short-term government bills are money-market instruments, which the book counts in cash equivalents.

Option (2) Commercial Papers — A true statement. They are short-term money-market instruments, readily convertible into cash.

Option (3) Marketable Securities — A true statement. The book treats short-term marketable securities as cash equivalents.