Cash and Cash Equivalents

Free CPA FAR (Financial Accounting & Reporting) lesson in Select Balance Sheet Accounts. 15 min read, ~2,240 words.

Cash equivalents require original maturity of three months or less from the date of acquisition, not from issuance. Legally restricted compensating balances are reclassified out of cash (current if tied to short-term debt, noncurrent if tied to long-term debt); informal balances stay in cash. Restricted cash must be reconciled into...