CS Executive · Corporate Accounting and Financial Management · Cash Flows
Which item is classified as cash under AS 3 Cash Flow Statements?
Under AS 3, cash comprises cash on hand and demand deposits with banks. A five-year fixed deposit, debtors and stock are not cash, since they are not immediately available money held on hand or in demand deposits.
- ACash on hand and demand deposits with banksCorrect
- BFixed deposits with a maturity of five years
- CDebtors due within 30 days
- DStock of finished goods
Explanation
AS 3 defines cash as cash on hand and demand deposits with banks. Long-term deposits, debtors and stock are not cash.
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