Which statement is not correct?
A)Cash is an idle asset for a business.
B)Bank overdrafts cannot be considered cash equivalents.
C)Cash equivalents are readily convertible to cash.
D)Cash and cash equivalents is reconciled in the cash flow statement.

Question

Quizplus · Accepted Answer

Bank overdrafts are considered as borrowings and not cash equivalents as they do not meet the criteria of being readily convertible into cash.

Which Statement Is Not Correct