Practice: Cash & Receivables Quiz Quiz | Financial Accounting & Reporting (FAR)

Question 1

Which of the following qualifies as cash under U.S. GAAP?

Answer

Postdated customer checks

Answer

Demand deposits in a checking account

Answer

Certificates of deposit maturing in two years

Answer

Restricted construction fund

Question 2

A cash equivalent is best described as:

Answer

A short-term, highly liquid investment with an original maturity of three months or less

Answer

Any investment that matures within one year

Answer

Any stock investment

Answer

Any investment purchased with excess cash

Question 3

Which factor determines whether an investment qualifies as a cash equivalent?

Answer

Current market value

Answer

Remaining maturity

Answer

Original maturity when acquired

Answer

Interest rate

Practice Quiz