ACC 110 Study Guide - Cash Flow, Accounts Receivable, Financial Statement

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14 Apr 2011
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Cash, receivables, and the time value of money. E6-1. a. b. c. d. e. f. g. h. i. This item should be included in cash and cash equivalents because cash in the safe is readily available for use. This item should be included in cash and cash equivalents because it can be converted quickly and easily into a known amount of cash. This item could be categorized as a cash equivalent as it appears to represent a source of funds the company uses to help manage its cash. The unborrowed portion of the line isn"t included in cash and cash equivalents. Receivables aren"t included in cash and cash equivalents, whether they are current or non-current. Because the gic matures in 18 months it shouldn"t be classified as cash and cash equivalents. The gic might be convertible to cash at any time but the amount of cash it would realize would very depending on the time.

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