Question

Cash includes currency and coins, balances in checking accounts, and items acceptable for deposit in these accounts, such as checks and money orders received from customers. These forms of cash represent amounts readily available to pay off debt or to use in operations, without any legal or contractual restriction. A company had the following balances in various cash accounts on its balance sheet: Checking account balance $12,300 Savings account balance 34,500 Petty cash fund 1,200 What amount should be reported as cash under the current assets section of the company's balance sheet

Answer 1

Answer:

$48,000.

Explanation:

For the Cash balance to be reported, consider the total of all cash and cash equivalents which can be used up by the company within a period of 12 months.

Checking account balance     $12,300

Savings account balance       $34,500

Petty cash fund                          $1,200

Total                                        $48,000

The amount should be reported as cash under the current assets section of the company's balance sheet is  $48,000.