Chapter 7 - Cash and Receivables - LO 1

Which of the following is not considered cash for financial reporting purposes?

• Petty cash funds and change funds

• Money orders, certified checks, and personal checks

• Coin, currency, and available funds

• Postdated checks and I.O.U.'s

Which of the following is considered cash?

• Certificates of deposit (CDs)

• Money orders

• Money market savings certificates

• Postdated checks

Travel advances should be reported as

• supplies.

• cash because they represent the equivalent of money.

• investments.

• None of these answer choices are correct.

Which of the following items should not be included in the Cash caption on the statement of financial position?

• Coins and currency in the cash register

• Checks from other parties presently in the cash register

• Amounts on deposit in checking account at the bank

• Postage stamps on hand

All of the following may be included under the heading of "cash" except

• currency.

• money market funds.

• checking account balance.

• savings account balance.

In which account are post-dated checks received classified?

• Receivables

• Prepaid expenses

• Cash

• Payables

In which account are postage stamps classified?

• Cash

• Supplies

• Receivables

• Inventory

What is a compensating balance?

• Savings account balances

• Margin accounts held with brokers

• Temporary investments serving as collateral for outstanding loans

• Minimum deposits required to be maintained in connection with a borrowing arrangement

Under which section of the statement of financial position is "cash restricted for plant expansion" reported?

• Current assets

• Non-current assets

• Current liabilities

• Equity

A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and

• is acceptable as a means to pay current liabilities.

• has a current market value that is greater than its original cost.

• bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation.

• is so near its maturity that it presents insignificant risk of changes in interest rates.