Question

Select the most appropriate alternative from those given below and rewrite the sentence.
Fixed Deposit A/c comes under ________ group.
a. Deposits
b. Investment
c. Bank A/c
d. Current Asset

Answer 1

Fixed deposit is the movement of cash from bank account to fixed deposit account. When the business has surplus cash it can invest in fixed deposit to earn interest. Fixed deposit can be said as a current or non current asset based on the duration. Hence, fixed deposits comes under Current asset group. Assuming they are for 12 or less than 12 months.