Which of the Following Must Be Disclosed in the Footnotes

question 108

Multiple Choice

Which of the following must be disclosed in the footnotes to the financial statements?

• A)reclassification of a cash amount that is restricted from use in the current operating cycle
• B)negative cash balance that occurs when a company writes a check in an amount that exceeds the account balance
• C)short-term liquid investment with original maturity of three months or less
• D)minimum cash balance required to be maintained by a credit agreement

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Definitions:

Shipping Costs

Expenses associated with the delivery of goods from the seller to the buyer, which can include packing, postage, and insurance costs.

Cash Payback Formula

A method used to calculate the amount of time it takes for an investment to generate cash flows sufficient to recoup the initial investment cost.

Net Income

The net income of a company, which is the remaining amount after deducting all costs and taxes from its total revenue.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.