Question

Consider the following: Cash in Bank - checking account of $13,500, Cash on hand of $500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling$124,000.
How much should be reported as cash in the statement of financial position?
a. $ 13,500.b. $ 14,000.c. $ 17,500.d. $131,500.

Answer 1

Answer:

b. $ 14,000

Explanation:

In the cash section of balance sheet, it includes cash on hand, cash in check accounts and normal deposit with term lower than 3 months.

Thus in this case, the cash should be reported in the statement = Cash in Bank - checking account of $13,500 + Cash on hand of $500 = $14,000

Post-dated checks received totaling $3,500 is a check on which the issuer has stated a date later than the current date, so it is not reported in current position

Certificates of deposit totaling$124,000 is reported in investment (short term or long term subject to the tenor of deposit)