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21 June, 19:06

Which of the following is considered cash for financial reporting purposes?

(A) inventory that is likely to be sold within three months.

(B) amounts to be collected from customers.

(C) amounts owed to suppliers.

(D) balances in savings accounts

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Answers (2)
  1. 21 June, 19:22
    0
    (D) balances in savings accounts

    Explanation:

    Cash is an asset in the financial statement and it is made of cash and liquid assets that are easily converted to cash. Hence it is referred to as a Cash and Cash equivalent.

    For financial purpose, Cash is balances in savings accounts. Inventory that is likely to be sold within three months is Inventory.

    Amounts to be collected from customers is Accounts receivable and amounts owed to supplier is Accounts payable.
  2. 21 June, 20:53
    0
    (D) Balances in savings accounts.

    Explanation:

    Cash and cash equivalents are the value of a company as asset that is cash or readily convertible into cash. They are most liquid assets of a company.

    Savings account is referred to as one of the most liquid asset that is convertible into cash with a minimum or no loss in its value. They are considered liquid because cash can be withdrawn from account easily to settle liabilities when they fall due.
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