Under Which Section Of The Balance Sheet Is "Cash Restricted For Plant Expansion'' Reported
The correct option is b), as cash restricted for plant expansion, which is a long-term project as plant is a Non Current Asset or Fixed Asset , is specifically assigned and hold for more than one year. The cash is specifically restricted to plant expansion and it is not available to use for operating, investing and financing activities. Such cash must be distinguished from cash used for immediate needs such as used in operations to meet daily expenses to run the business effectively. Cash restricted for special purpose and not utilized for more than one year is categorized under Non Current Assets on Balance Sheet . On balance sheet, it must be distinguished from other cash used for immediate use or daily operations. Cash is a Current Asset but restricted cash can be a current asset (to be used within one year or one year) or Non current assets (not available for using more than one year). During the period of restriction, the cash is utilized only for that special project ...