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Disclosure of Cash and cash equivalents

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For some of Canadian companies...

1. Why do you think some companies classified cash as a separate account in the balance sheet while other firms did not?

2. Do you think that it is more useful to the user of the financial statement to classify cash separately rather than combining cash with cash equivalents? Explain your answer.

3. Does classifying cash and cash equivalents together on the balance sheet contradict any generally accepted accounting principles?

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Solution Summary

The solution explain the disclosure of cash and cash equivalents in the financial statements.

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Some companies disclose cash as a separate account because they want to give proper disclosure of their assets. The cash account on the balance sheet should include coin and currency on hand, deposits in checking and savings ...

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