Question

Which of the following would NOT be classified as cash? •coins •undeposited cheques •term deposits •undeposited...

Which of the following would NOT be classified as cash?

•coins
•undeposited cheques
•term deposits
•undeposited Visa and Mastercard receipts
•cash in the bank held as a “compensating balance”
•cash in the bank restricted for a particular purpose (eg. a sinking fund)
•cash in a US dollar account
•“petty cash” on hand

Which of the above would not be valued at its “face” value?

Business   Accounting   
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Answer #1

Cash and cash equivalents are assets that are highly liquid and readily available for use. Thus following are not cash:

cash in the bank held as a “compensating balance” - This same also a restricted money, explanation given below.

cash in the bank restricted for a particular purpose - Since its restricted for a particular purpose. This will be recorded under current or non current asset accordingly, and not under cash and cash equivalents. - This will not be valued at fair value

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