Question

What does cash on hand measure?

• A. The value at which an asset is carried on the company’s financial “books” and shown on the Balance Sheet.

• B. The cash generated by a company’s core operations.

• C. Highly liquid assets, such as money market funds or government bonds, that are easily converted into cash within 90 days without risk of a change in value.

• D. Cash on hand measures the amount of available cash and low-risk, liquid cash-like assets you can convert to cash in 90 days or less.

Answer 1

WHAT DOES CASH ON HAND MEASURES

ANS : CORRECT OPTION ( D )

Cash on hand measures the amount of available cash and low-risk, liquid cash -like assets you can convert to cash in 90 days or less. - Cash on hand is the total amount of any accessible cash. Cash regardless it is in your pocket or in bank account. Investments that can easily be converted in to cash in 90 days or less.

( from the above options option C is also correct , because the cash on hand includes cash and cash equivalents, so under cash equivalents, highly liquid investments that are easily convertible in to cash and that are near to their maturity and they have no risk of a change in value, is included. And also includes money market , shorterm government bonds as an example of cash ).

incorrect option : ( A ) - The amount at which an asset is carried to financial statement and that of balancesheet

such amount is called carrying amount. It is the cost of an asset less depreciation.

incorrect option : ( B ) - the cash generated by a company's core operations.

Cash flow from operating activities indicates the cash generating abilities of a company's core business operations.