Question 2)Which section of the statement of financial position should include "Cash restricted for retirement of long-term debt" ? A

Accounting Jan 18, 2021

Question 2)Which section of the statement of financial position should include "Cash restricted for retirement of long-term debt" ? A. Non-current liabilities B. Equity section c Non-current assets D. Current liabilities

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Answer

--Correct Answer = Option 'C' Non Current Assets.

--Cash that is restricted for retirement of long term debt, is not shown as normal cash and cash equivalent - Current Assets.

--It is shown under "Investments and Funds" and its purpose is disclosed in the notes to financial statements.

--"Investments and Funds" are not current assets, hence these are shown under Non Current Assets category.

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