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CMA Intermediate · Corporate Accounting and Auditing · Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

Under Schedule III, in the Balance Sheet of a company, 'Cash and cash equivalents' under current assets would NOT normally include which of the following?

Bank deposits with more than twelve months maturity held as margin money are not cash and cash equivalents. Schedule III includes only bank balances, cheques and drafts on hand, and cash on hand there, while long-term deposits are shown separately as other bank balances or non-current assets.

  1. ABalances with banks in current accounts
  2. BCheques and drafts on hand
  3. CCash on hand
  4. DBank deposits with more than twelve months maturity held as margin moneyCorrect

Explanation

Cash and cash equivalents include balances with banks, cheques and drafts on hand, and cash on hand. Bank deposits with original maturity beyond twelve months are shown separately as other bank balances or other non-current assets, not as cash equivalents.

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