55 SURGENT 2211

Question 1

2211.01

Answer 1

Cash may be categorized as unrestricted and restricted. Unrestricted cash is cash available for current operations. It is the most liquid asset; accordingly, it is listed first in the current assets section. Restricted cash is all cash not designated or available for use in current operations. Examples are special cash funds set aside for the acquisition of noncurrent assets or the retirement of long-term debt and cash in banks of foreign countries that place restrictions on its transfer. Restricted cash for use in other than current operations should be classified as long-term investments rather than as current assets.