Which of the following items is NOT included in cash on the balance sheet?

• A. Demand deposits in banks
• B. Coins and currency on hand
• C. Postdated checks received from customers
• D. Money orders

Answer: (C)

Verified step by step guidance

1. Understand the concept of 'cash' in financial accounting: Cash on the balance sheet includes items that are readily available for use in transactions or can be easily converted into cash. Examples include coins, currency, demand deposits, and money orders.
2. Review the items listed in the problem: Demand deposits in banks, coins and currency on hand, postdated checks received from customers, and money orders.
3. Analyze each item: Demand deposits in banks, coins and currency on hand, and money orders are considered cash because they are liquid and readily available for use.
4. Consider the nature of postdated checks: Postdated checks are not included in cash because they cannot be cashed or used until the date specified on the check. They are considered receivables rather than cash.
5. Conclude that postdated checks received from customers are the correct answer because they do not meet the criteria for inclusion in cash on the balance sheet.