Identify Whether Each of the Following Items Should Be Classified

question 87

Essay

Identify whether each of the following items should be classified in "cash and cash equivalents" on the balance sheet. Assume that the reporting entity has operations in Canada.
$\begin{array}{c}\begin{array}{|l}\hline\\\\\\\hline a.\\\\\hline b.\\\\\hline c.\\\hline d.\\\hline e.\\\\\\\hline\end{array}\begin{array}{|l|}\hline\\\\\\\hline \text {Negative balance in a chequing account}\\\text { (overdraft).}\\\hline \text {Investment in Treasury bills maturing}\\\text { 70 days after the year-end.}\\\hline \text {100 ounces of silver.}\\\hline \text {Chequing account in Canadian dollars.}\\\hline \text {Investment in U.S. government}\\\text {Treasury bills maturing 80 days after}\\\text { the yearend.}\\\hline \end{array}\begin{array}{c|}\hline\text {Cash and}\\ \text {cash}\\\text { equivalents}\\\hline\\\\\hline\\\\\hline\\\hline\\\hline\\\\\\\hline\end{array}\begin{array}{c|}\hline\text {Readily}\\\text {convertible}\\\text {to cash?}\\\hline\\\\\hline\\\\\hline\\\hline\\\hline\\\\\\\hline\end{array}\begin{array}{c|}\hline\text {Risk of}\\ \text {change in}\\\text { cash value?}\\\hline\\\\\hline\\\\\hline\\\hline\\\hline\\\\\\\hline\end{array}\end{array}$

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Definitions:

Internal User

An internal user is an individual within an organization, such as managers and employees, who uses the financial information to make decisions regarding the operations of the company.

Accounting Data

Accounting data encompasses all the financial information and records of a business’s transactions, including sales, purchases, expenses, and revenues.

Reporting Entity Concept

An accounting principle that identifies the entity for which financial statements are prepared, distinct from its owners, managers, or other entities.