What happens when the Cash account has a credit balance?Select answer from the options belowit will be reported as a current liability on the balance sheetnothing - it is supposed to have a credit balancethe company will use its restricted fundsit is reported as a contra-cash account under current assetsSave for LaterSubmit Answer

The following are classified in the balance sheet as a current assets, except;a.Cashb.Buildingc.Accounts Receivabled.Cash equivalents

To qualify for reporting as part of cash in the current assets section of the statement of financial position, cash item must be any of the following, except:Group of answer choicesUnrestrictedIntended for the payment of operating expensesCash fund for the acquisition of non-current asset which is expected to be disbursed within 12 months from reporting dateIntended for the settlement of current liabilities

DEF Company requires cash to be set aside as collateral for a letter of credit which will be used by the company in the next 12 months. How will this cash be classified?Select answer from the options belownon-current asset as it is restricted cashcurrent liability as it is restricted cashcurrent asset as it is not restricted cashcurrent asset as it is restricted cashSave for LaterSubmit Answer

Compensating balanceGroup of answer choicesIf legally restricted is reported as part of the regular cash account.If legally restricted is reported as cash held as compensating balance and classified as current asset if related to short term loan.If legally restricted is reported as cash held as compensating balance and classified as current asset if related to long term loanIf not legally restricted is reported separately in the current asset section of the statement of financial position.

Asset accounts normally have credit balances and expense accounts normally have debit balances.  True False