CS Executive · Corporate Accounting and Financial Management · Cash Flows
Under Ind AS 7, cash comprises:
Under Ind AS 7, cash comprises cash on hand and demand deposits. Term deposits of any maturity, receivables and inventory are not cash. Cash equivalents are a separate category, so these items do not become cash merely because they are liquid.
- ACash on hand and demand depositsCorrect
- BCash on hand and all bank fixed deposits regardless of maturity
- CCash on hand and trade receivables due within 30 days
- DCash on hand and inventory that can be quickly sold
Explanation
Ind AS 7 defines cash as cash on hand and demand deposits. Fixed deposits without demand feature, receivables and inventory are not cash. Cash equivalents are a separate concept covering short-term highly liquid investments, so receivables and stock never qualify as cash.
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