Cash Management Quiz

Which of the following should not be considered cash for financial reporting purposes?

• petty cash fund

• money order

• coin and currency

• IOUs.

Which of the following is usually considered cash?

• certificate of deposit

• checking account

• money market saving certificate

• treasury bill.

Which of the following should not be included in 'cash'?

• travel cash advance

• certified check

• personal check

• manager check.

All of the following may be included in 'cash', except?

• currency

• money market instrument

• checking account balance

• saving account balance.

Under which classification is 'cash restricted for plant expansion' reported?

• current assets

• noncurrent assets

• current liabilities

• Equity.

What is a compensating balance?

• saving account balance

• margin account held with broker

• temporary investment serving as collateral for outstanding loan

• minimum deposit required to be maintained in connection with a borrowing arrangement.

A compensating balance

• must be included in cash and cash equivalent.

• which is legally restricted and related to a long-term loan is classified as a current asset.

• which is legally restricted and related to a short-term loan is classified separately as current asset.

• which is not legally restricted as to withdrawal is classified separately as current asset.

Deposits held in compensating balance

• usually do not earn interest

• if legally restricted and held against short-term credit may be included as cash.

• if legally restricted and held against long-term credit may be included among current assets.

• none of these.

What is the treatment of a customer's postdated check?

• accounts receivable

• prepaid expenses

• cash

• accounts payable.

Bank overdraft generally should be

• reported as a deduction from current assets

• reported as a deduction from cash

• netted against cash and a net cash amount reported.

• reported as current liability.