CS Executive · Corporate Accounting and Financial Management · Cash Flows
Under AS 3, 'cash' comprises which of the following?
Under AS 3, cash comprises cash on hand and demand deposits with banks. Fixed deposits for long periods, listed shares and trade receivables are not part of cash under the definition, even if they can be converted to cash fairly quickly.
- ACash on hand and demand deposits with banksCorrect
- BCash on hand and fixed deposits of three years with banks
- CCash on hand and investments in listed shares
- DBank balances and trade receivables due within a month
Explanation
AS 3 states that cash comprises cash on hand and demand deposits with banks. Long-term fixed deposits, listed shares and receivables are not cash under this definition, even if they may be realised soon.
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