INTERMEDIATE ACCOUNTING CH. 1
Problem 1-1 Multiple choice (IAA)
1. Which of the following is usually considered cash?
a. Certificate of deposit
b. Checking account
c. Money market certificate
d. Postdated check
2. All of the following may be included in cash, except?
a. Currency
b. Money market instrument
c. Checking account balance
d. Saving account balance
3. Which statement is not true about bank overdraft?
a. Overdraft cannot be offset against positive balance in other bank account bur reported
as current liability
b. Bank overdraft can never be included as component of cash and cash
equivalent
c. Generally, bank overdraft is not allowed
d. Overdraft can be offset against other bank account when payable on demand and
often fluctuates from positive to overdrawn as an integral part of cash management
4. What is a compensating balance?
a. Saving account balance
b. Demand deposit account balance
c. Temporary investment as collateral for loan
d. Minimum deposit required to be maintained in connection with a borrowing
arrangement
5. A compensating balance
a. Must be included in cash and cash equivalent
b. Which is legally restricted and related to a long-term loan is classified as current asset
c. Which is legally restricted and related to a short-term loan is classified
separately as current asset
d. Which is not legally restricted as to withdrawal is classified separately as current asset
This study source was downloaded by 100000899194722 from CourseHero.com on 05-30-2025 15:03:42 GMT -05:00
https://www.coursehero.com/file/249171928/Problem-1-1-INTACC-1pdf/
Problem 1-1 Multiple choice (IAA)
1. Which of the following is usually considered cash?
a. Certificate of deposit
b. Checking account
c. Money market certificate
d. Postdated check
2. All of the following may be included in cash, except?
a. Currency
b. Money market instrument
c. Checking account balance
d. Saving account balance
3. Which statement is not true about bank overdraft?
a. Overdraft cannot be offset against positive balance in other bank account bur reported
as current liability
b. Bank overdraft can never be included as component of cash and cash
equivalent
c. Generally, bank overdraft is not allowed
d. Overdraft can be offset against other bank account when payable on demand and
often fluctuates from positive to overdrawn as an integral part of cash management
4. What is a compensating balance?
a. Saving account balance
b. Demand deposit account balance
c. Temporary investment as collateral for loan
d. Minimum deposit required to be maintained in connection with a borrowing
arrangement
5. A compensating balance
a. Must be included in cash and cash equivalent
b. Which is legally restricted and related to a long-term loan is classified as current asset
c. Which is legally restricted and related to a short-term loan is classified
separately as current asset
d. Which is not legally restricted as to withdrawal is classified separately as current asset
This study source was downloaded by 100000899194722 from CourseHero.com on 05-30-2025 15:03:42 GMT -05:00
https://www.coursehero.com/file/249171928/Problem-1-1-INTACC-1pdf/
