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Deposits held as compensating balance

WebDeposits held as compensating balance a. Usually do not earn interest. b. If legally restricted and held against short-term credit may be … WebDec 31, 2016 · Department of Accountancy and Management Accounting. Departmental Quiz #1 – ACCL03B. Marian Company reported the checkbook balance on December 31, 2016 at P8,000,000. In addition, the entity held the following items in the safe on that date: Check Payable to Marian, dated January 2, 2024 in payment of a sale,

Compensating Balance: Definition, Example, Accoiunting Rules - Investopedia

WebCompensating balance is an amount that is kept as collateral for the loan taken as per the terms of the agreement. It is the minimum balance maintained by the borrower with the … WebDeposits held as compensating balance. A. Usually do not earn interest. B. If legally restricted and held against short term credit may be included as cash. C. If legally restricted and held against long term credit may be included among current assets. D. … holkham outlaw https://jonputt.com

Accounting Theories with Answers - Drills PART I

WebDeposits held as compensating balances usually do not earn interest. if legally restricted and held against short-term credit may be included as cash. if legally restricted and held against long-term credit may be included among current assets. none of these. ... and one of them has a positive cash balance and the other has an overdraft, ... WebA compensating balance is that portion of any demand deposit maintained by a corporation which constitutes support for existing borrowing arrangements of a corporation with a lending institution. A compensating balance representing a legally restricted deposit held against short-term borrowing arrangements should be stated separately among the ... WebStudy with Quizlet and memorize flashcards containing terms like Which of the following is considered cash? a. Certificates of deposit (CDs) b. Money market checking accounts c. Money market savings certificates d. Postdated checks, Which of the following is not considered cash for financial reporting purposes? a. Petty cash funds and change funds … humane society help with vet bills

What Is a Compensating Balance?

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Deposits held as compensating balance

30. Deposits held as compensating balances A) if legally… - JustAnswer

WebA restricted deposit held as a compensating balance against long-term borrowing arrangements should be separately classified as a noncurrent asset in either the investments or other assets section., Restricted cash for debt redemption would be reported in the long-term asset section, probably in the investments section.

Deposits held as compensating balance

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WebView questions only. See Page 1. 32. Deposits held as compensating balances a. usually do not earn interest. b. if legally restricted and held against short-term credit may be included as cash.c. if legally restricted and held against long-term credit may be included among current assets. d. none of these. answer: Many answers are possible.7 - 2. WebDeposits held as compensating balances 1. A. Usually do not earn interest. B. If legally restricted and held against short-term credit may be included as cash. C. If legally …

WebLegally restricted deposit held as compensating balance against borrowing arrangement. All of the following can be classified as cash and cash … WebMay 23, 2024 · Common examples of restricted cash include refundable deposits, minimum balances on bank accounts, and funds held in escrow. ... and funds held in escrow. ... A compensating balance is typically ...

WebDeposits held as compensating balance A. Usually do not earn interest B. If legally restricted and held against short term credit may be included as cash C. If legally … WebAug 15, 2015 · compensating balance meaning: the amount of money that a customer who has taken out a loan with a bank or who uses the bank's…. Learn more.

WebCompensating balance a. Is a minimum or average balance on deposit with a bank b. Constitutes support for existing borrowing arrangements c. Provides a source of funds to …

WebWhat is a compensating balance? a. Minimum deposits required to be maintained in connection with a borrowing arrangement. b. Savings account balances. c. Margin … humane society holiday giftsWebNov 19, 2024 · A bank or other lender may require the company to set up a designated restricted cash account in which the company must maintain a minimum balance, … humane society hernando county flWebA compensating balance A. compensates a financial institution for services rendered by providing it with deposits of funds B. is used to compensate for possible losses on a marketable securities portfolio. C. is a level of inventory held to compensate for variations in usage rate and lead time. D. is the amount of prepaid interest on a loan. humane society hinesville gaWebSaving account balance. 3. Deposits held as compensating balance. a. Usually do not earn interest. b. If legally restricted and held against short-term credit may be included as cash. c. If legally restricted and held against long-term credit may be included among current assets. d. humane society hiringWebDec 25, 2024 · A compensating balance is a minimum bank account balance that a borrower agrees to maintain with a lender. The purpose of this balance is to reduce the … holkham outlaw 2022WebSince the compensating balance is legally restricted, it is excluded from the amount shown as cash. In this case, the compensating balance is shown as “cash held as compensating balance” as a current asset because the related loan is short-term. The term of the time deposit is not given. holkham pottery historyWebAnalysis. The cash flow statement should reflect a financing inflow of $100 million. Although it is restricted cash, it is part of the change in cash, cash equivalents, and restricted cash. Repayment of the $40 million existing debt is a $40 million financing outflow. holkham outlaw triathlon