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Questions and Answers
Which of the following is considered as cash?
Which of the following is considered as cash?
- Bank overdrafts
- Bank drafts
- Restricted cash
- Funds on deposit at the bank (correct)
What is a compensating balance in relation to cash?
What is a compensating balance in relation to cash?
- A balance used for dividend payments
- A balance for check processing services
- A minimum cash balance required by lending institutions (correct)
- A balance set aside for plant expansion
What may restrict cash besides contractual requirements?
What may restrict cash besides contractual requirements?
- Bank overdrafts
- Personal checks
- Special funds voluntarily maintained for future plant expansion (correct)
- Bank drafts
Which of the following is an example of restricted cash?
Which of the following is an example of restricted cash?
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What is the purpose of maintaining a compensating balance?
What is the purpose of maintaining a compensating balance?
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Which of the following is an example of cash according to the text?
Which of the following is an example of cash according to the text?
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What is the primary purpose of maintaining a compensating balance in checking or savings accounts?
What is the primary purpose of maintaining a compensating balance in checking or savings accounts?
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What may lead to cash being restricted besides contractual requirements?
What may lead to cash being restricted besides contractual requirements?
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What is an example of cash equivalent according to the text?
What is an example of cash equivalent according to the text?
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What is the distinguishing factor between free cash and restricted cash as per the text?
What is the distinguishing factor between free cash and restricted cash as per the text?
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