Cash That Is Restricted and Not Available for Current Operations

question 53

Multiple Choice

Cash that is restricted and not available for current operations is reported in the balance sheet as:

• A) Equity.
• B) Investments.
• C) Liabilities.
• D) A separate section between liabilities and equity.

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Definitions:

Second-Year Depreciation

The depreciation expense allocated in the second year of an asset's useful life, considering the chosen depreciation method.

Straight-Line Method

A depreciation method applying an equal expense rate each year over the useful life of the property.

Estimated Residual Value

The anticipated market value of an asset at the end of its useful life, used in calculating depreciation.

Double-Declining-Balance

A method of accelerated depreciation which doubles the normal depreciation rate, reducing the value of an asset more quickly.