Computing the Cash Balance

Listed below are ten items that may be found on a balance sheet.

Required:

Indicate with Yes or No whether each of the items should be included in the cash balance presented on the balance sheet. Also, indicate the normal balance sheet treatment for each item in the "Classification of Items" column. $($If "Yes" is selected for the "Included in Cash Balance" column, choose "Cash" as the choice in the "Classification of Items" column.$)$

ItemIncluded in

Cash BalanceClassification

of ItemsNSF checks

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseAccounts Receivable

Savings account

YesNoYes

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCash

Compensating balance

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCurrent or Noncurrent Asset

Postdated checks

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseAccounts Receivable

IOUs

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseAccounts Receivable

Cash on hand

YesNoYes

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCash

Cash in sinking fund

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseLong$-$term Investment

Travel advance

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpensePrepaid Expense

Bank draft

YesNoYes

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCash

Prepaid debit card

YesNoYes

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCash

Checking account

YesNoYes

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseCash

Money market account

YesNoNo

Accounts ReceivableCash EquivalentCurrent or Noncurrent AssetLong$-$term InvestmentPrepaid ExpenseLong$-$term Investment

Bank overdraft

YesNoNo

Accounts ReceivableCashCurrent LiabilityCurrent or Noncurrent AssetPrepaid ExpenseCurrent Liability

Certificate of deposit

YesNoNo

Accounts ReceivableCashCurrent or Noncurrent AssetLong$-$term InvestmentShort$-$term InvestmentLong$-$term Investment