Which of the Following Statements Regarding Restricted Amounts of Cash

question 106

Multiple Choice

Which of the following statements regarding restricted amounts of cash is CORRECT?

• A)The Cash balance includes amounts that are restricted.
• B)The minimum balance, under a compensating balance agreement, is the same as cash.
• C)None of the Cash balance is restricted in any way.
• D)Restricted amounts of cash need to be separately disclosed as such on the statement of stockholders' equity.

---

Definitions:

Coastal Town

A town situated on or near a coast, often affected by maritime activities and economies.

Moral Hazard

A situation in economic theory where one party is more likely to take risks because another party bears the cost of those risks.

Flood Control System

A flood control system consists of structures and measures implemented to manage and regulate water flow to prevent or mitigate the effects of flooding in vulnerable areas.

Insurer

An entity which provides insurance is responsible for compensating its clients against losses from certain specified risks.