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On October 31, 2020, a company had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2020 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The thit account, used for regular corporate operations, has a positive balance. How should these accounts be reported in the October 31, 2020 Statement of Financial Position The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as current liability. The segregated and the regular accounts should be reported as current assets net of the overdraft.

On October 31, 2020, a company had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2020 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The thit account, used for regular corporate operations, has a positive balance. How should these accounts be reported in the October 31, 2020 Statement of Financial Position The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as current liability. The segregated and the regular accounts should be reported as current assets net of the overdraft.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On October 31, 2020, a company had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2020 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in the October 31, 2020 Statement of Financial Position? The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. O The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as current liability. The segregated and the regular accounts should be reported as current assets net of the overdraft. O The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdrafts.
Transcribed Image Text:On October 31, 2020, a company had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2020 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in the October 31, 2020 Statement of Financial Position? The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. O The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as current liability. The segregated and the regular accounts should be reported as current assets net of the overdraft. O The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdrafts.
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