MANAGEMENT

Detailed explanation-1: -Cash equivalents are certificates of deposit, money market funds, short-term government bonds, and treasury bills. To qualify as current assets, these items must not have any restrictions that inhibit their short-term liquidity.

Detailed explanation-2: -Restricted Cash on the Balance Sheet Cash that is restricted for one year or less is categorized under current assets, while cash restricted for more than a year is categorized as a non-current asset.

Detailed explanation-3: -Understanding Cash and Cash Equivalents (CCE) If a company has cash or cash equivalents, the aggregate of these assets is always shown on the top line of the balance sheet. This is because cash and cash equivalents are current assets, meaning they’re the most liquid of short-term assets.

Detailed explanation-4: -Restricted cash refers to money that is held for a specific purpose and thus not available to the company for immediate or general business use. Restricted cash appears as a separate item from the cash and cash equivalents listing on a company’s balance sheet.

Detailed explanation-5: -One example of restricted cash would be a bank loan requirement, whereby a borrower must maintain a specific percentage of the total loan amount in cash at all times.