You are absolutely correct!
Short term, highly liquid investments.
GASB No. 9 Paragraph 8 states that Cash Equivalents are defined as short term, highly liquid investments that are:
- Readily convertible to known amounts of cash
- So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.Governments should present a statement of cash flows for proprietary funds based on the provisions of Statement No. 9, as amended by this Statement. The direct method of presenting cash flows from operating activities (including a reconciliation of operating cash flows to operating income) should be used.