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Restricted Cash: 10 facts



1. # Restricted Cash is Recorded as an Asset on the Balance Sheet


2. # It Represents Cash that is Not Readily Available for General Use


3. # Restricted Cash is Set Aside for Specific Purposes or Obligations


4. # Examples of Restricted Cash Include Escrow Accounts and Security Deposits


5. # They are Categorized as Current or Non-current Assets


6. # Restricted Cash is Disclosed in the Notes to the Financial Statements


7. # Companies Follow Legal or Contractual Requirements for Restricted Cash


8. # Restricted Cash Represents a Claim on Future Cash Outflows


9. # It Provides Security or Collateral for Certain Transactions


10. # It Aids in Maintaining Financial Stability and Trust



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Check out our Guide to Reading a BALANCE SHEET with QUIZ

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