BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
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AVERAGE11. At December 31 of the current year, an entity had cash accounts at three different banks. One account balance is segregated solely for payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should three accounts be reported in the December 31 classified balance sheet?
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The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as a current liability.
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The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability.
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The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdraft.
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The segregated and regular accounts should be reported as current assets net of the overdraft.
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Explanation:
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