Compensating balance agreements are held against short-term borrowings should
A) only be described in the footnotes to the financial statements.
B) be separately reported in the current assets portion of the balance sheet.
C) be separately classified as noncurrent assets on the balance sheet .
D) not be shown on the balance sheet.

Question

Quizplus · Accepted Answer

Compensating balances are typically reported as current assets on the balance sheet because they are cash reserves that are restricted for a short-term borrowing arrangement.

Compensating Balance Agreements Are Held Against Short-Term Borrowings Should