Cash should be correctly identified and classified in the balance sheet. The classification that is correct is:

Question

Quizplus · Accepted Answer

Cash on deposit is typically classified as a current asset, as it is expected to be used within the next year. Fixed-term deposits may be classified as either current or non-current assets depending on the maturity date of the deposit. If the deposit will mature within the next year, it is classified as a current asset. If the deposit will mature after more than one year, it is classified as a non-current asset.

Cash Should Be Correctly Identified and Classified in the Balance