Albert Company's Accountant Considered the Following Items: Cash in a Checking

question 113

Multiple Choice

Albert Company's accountant considered the following items: cash in a checking account, $1,400; cash in a time deposit account, $450; cash pledged as collateral, $250. How much should appear as Cash on the balance sheet?

• A)$1,200
• B)$1,650
• C)$1,850
• D)$2,100

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Short-Term Receivables

Assets expected to be turned into cash within a year, such as accounts receivable from sales or services.

Risk Assessment

The process of identifying, analyzing, and evaluating risks associated with the objectives of an organization, essential for informed decision making and risk management.