Time Deposits are not categorized as Cash.

Undeposited Checks from customers are considered Cash.

Cash Equivalents are technically not cash because it is not immediately available for use.

Accounts Receivable is evidenced by a promissory note.

. The third line of the Statement of Financial Position (SFP)that says “as of December 31, 20X0, tells the reader that the balance reported to the SFP is the net effect of all transactions related to the specific account from the date of the establishment of the company up to the date of the SFP.

The consigned merchandise will be reported as inventory by the merchandise owner.

The items that are to be used in day to day activities of the company are included in the inventory.

. Prepaid Expense follows the accrual accounting, expenses are recorded only when purchased goods and services are used.

The cost of purchasing Property, Plant and Equipment is not immediately reported as expense rather recognized as asset, as the asset is used, a portion of the cost is transferred to expense.