Davis Construction Company has not been doing very well lately. The controller is looking over the invoices for bills that need paid this week, and realizes the company is approximately $7,000 short. The only account with excess cash is mandated to be only for cases of workers' compensation. Can the controller pull the money from that account? No, that is a short-term investment account, and the money cannot be converted into cash that quickly. O Yes, it is a cash equivalent account, which can be used to supply the money for the bills as long as the money is replaced within the month. O No, that is restricted cash and the money cannot be taken out to cover other expenses. O Yes, it is restricted cash, but as long as the money is replaced within a month of being taken out, it will balance out fine.

Davis Construction Company has not been doing very well lately. The controller is looking over the invoices for bills that need paid this week, and realizes the company is approximately $7,000 short. The only account with excess cash is mandated to be only for cases of workers' compensation. Can the controller pull the money from that account? No, that is a short-term investment account, and the money cannot be converted into cash that quickly. O Yes, it is a cash equivalent account, which can be used to supply the money for the bills as long as the money is replaced within the month. O No, that is restricted cash and the money cannot be taken out to cover other expenses. O Yes, it is restricted cash, but as long as the money is replaced within a month of being taken out, it will balance out fine.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 3A: You work as a cashier for a service business. Some days you are short of cash at the end of the day,...

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