Cash and Cash Equivalents Flashcards
1
Q
What is a cash equivalent??
A
it is a security easily converted into cash (highly liquid) original maturity in 90 days or less - from the date of purchase - DO NOT reclassify LT securities when they reach a maturity of 90 days or less.
2
Q
How is overdraft protection classified??
A
it it is in the same bank net them.
If it is separate banks show positive as asset and negative as a liability
3
Q
What is a compensating balance??
A
EXCLUDE from cash they are legally restricted deposits can be current or non-current
