Which of the Following Items Would Be Reported as Cash

question 232

Multiple Choice

Which of the following items would be reported as cash on the statement of financial position?

• A) Note payable due in 90 days.
• B) Cash equivalent.
• C) Cash that will be used for future expansion, beginning in eighteen months.
• D) Restricted cash that will not be used within the upcoming year.

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Definitions:

Effective Interest

The real cost of borrowing or the actual interest rate earned, considering compounding and fees.

Amortize Discount

The gradual reduction of a bond discount over the life of the bond, expensed as interest over the period.

Straight-Line Method

The Straight-Line Method is a way of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Other Than Temporary

Classification of impairments or losses indicating that the reduction in value is not expected to reverse in the near future.