CMA Intermediate · Corporate Accounting and Auditing · Cash Flow Statement
Which of the following items would be reported within 'cash' as defined in Ind AS 7, paragraph 6?
Cash comprises cash on hand and demand deposits. Ind AS 7 defines cash this way, so long-term fixed deposits, equity investments and trade receivables do not qualify as cash, as they are not cash in hand or demand deposits.
- ACash on hand and demand depositsCorrect
- BCash on hand and fixed deposits with three-year maturity
- CCash on hand and investments in equity shares
- DDemand deposits and trade receivables due within a month
Explanation
Ind AS 7 defines cash as comprising cash on hand and demand deposits. Long-term fixed deposits, equity shares and receivables are not demand deposits, so they are not cash. Option B is wrong because a three-year fixed deposit is not repayable on demand.
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