Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 7 - Fraud, Internal Control, and Cash - Questions - Page 373: 26

Answer

(a) Cash equivalents are the short term. (b) Cash restricted in use should be reported separately on balance sheet as restricted cash.

Work Step by Step

(a) Highly liquid investments that can be converted to a specific amount of cash. (b) If the restricted cash is expected to be used in the next year, it reports the amount as a current asset, else it will be reported as a non-current asset.
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