Asked by Jamie Osborn on Jul 06, 2024
Verified
A firm's available balance is defined as the:
A) Cash remaining after a firm pays its bills.
B) Balance appearing in the firm's cheque book.
C) Cash balance appearing on the firm's financial statement.
D) Money in the firm's bank account which can be spent.
E) Money a firm received and deposited on a given date.
Available Balance
The amount of funds in a bank account that is accessible for withdrawal or processing of checks or electronic payments, not including any holds, unprocessed transactions, or restrictions.
Cheque Book
A booklet of cheques provided by a bank allowing the account holder to pay others by writing cheques.
Financial Statement
A formal record of the financial activities and position of a business, individual, or other entity, typically including a balance sheet, income statement, and cash flow statement.
- Acquire knowledge of the variances between the firm’s ledger balance, available balance, and book balance.
Verified Answer
SE
Sandra Eliza SajiJul 13, 2024
Final Answer :
D
Explanation :
The available balance refers to the amount of money in a firm's bank account that is accessible for spending, which includes all cleared and uncleared deposits and withdrawals. This is distinct from the book balance or the balance that might appear on financial statements, as those figures can include items that are not yet cleared or are earmarked for other purposes.
Learning Objectives
- Acquire knowledge of the variances between the firm’s ledger balance, available balance, and book balance.