Which Statement Regarding Negative Cash Balances Is True

question 23

Multiple Choice

Which statement regarding negative cash balances is true?

• A)The amount is offset against other current assets because users need to know net current assets.
• B)The amount is shown as a current liability because a company cannot have a cash balance below zero.
• C)The company must obtain a loan to bring the cash balance to zero before financial statements are prepared.
• D)The negative cash balance is included as a current asset and discussed in a footnote to the financial statements.

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Definitions:

Standard Deviations

A measure of the amount of variation or dispersion of a set of values from the mean or average.

Independent

Free from external control or influence; not depending on another's authority or the occurrence of another variable in statistical contexts.

Standard Deviations

A metric that calculates the extent of spread or deviation of data points from their average value.

Independent

Free from outside control or influence, able to make decisions or act according to one's own principles.