Kyle is a staff auditor on the annual audit of Goodhue & Company, a major electronics retailer. In examining Goodhue & Company’s accounts, he found an account entitled “restricted cash.”

Required:
a. What is included in “restricted cash?”
b. How can Kyle audit restricted cash? List the audit steps.
c. Besides the account on the balance sheet, what else should Kyle be concerned about in the financial statements  that the restricted cash account and transactions affect?