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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