Builder's Guide to Accounting 06 Flashcards
- What is a DETAILED CASH RECEIPTS SUMMARY?
It shows:
a. CUSTOMER
b. cash received from customer
c. % of total, including a breakdown for ALL OTHER by Repairs & Improvements, Material Sales, etc.
- Why is a DETAILED CASH RECEIPTS SUMMARY better than a Regular SUMMARY OF CASH RECEIPTS?
Because it is a SUMMARY of the CASH received by job or type of business, showing WHERE INCOME IS GENERATED, thus MAKING IT AN EXCELLENT FORECASTING TOOL.
- What kind of report is the DETAILED CASH RECEIPTS SUMMARY?
FINANCIAL ACCOUNTING.
It is a management tool rather than an accounting report.
The ACCOUNTANT is concerned with making sure that EARNED and ACCRUED income, CASH and ACCOUNTS RECEIVABLE all balance, BUT YOU WANT TO KNOW WHERE THE CASH COMES FROM.
- When should you prepare a DETAILED CASH RECEIPTS SUMMARY?
Whenever you consider making changes in your business, before you decide to go into new markets or out of old ones, WHEN YOU WANT TO FORECAST FUTURE AVAILABLE CASH, or at least ONCE A MONTH, QUARTERLY, OR 6 MONTH PERIODS.
- Now you use the information from the DETAILED CASH RECEIPTS SUMMARY to PROJECT:
WHERE CASH WILL BE COMING FROM and HOW MUCH WILL BE COMING IN DURING THE NEXT FEW MONTHS.
- DETAILED BUDGETING FOR CASH IS DISCUSSED IN:
Ch 14
- What are some items to consider when making future CASH PROJECTIONS?
- Which current contracts will be completed soon and what will they be replaced with?
- Historically, how many projects are started on what quarter?
- What changes in MATERIAL PRICES are expected with coming changes in weather?
- What quarter sees an increase in Repairs & Improvements?
- CASH FORECASTS help you to:
understand your business and the market where you compete.
- The best way to figure your DIRECT COSTS and OVERHEAD EXPENSE for each job is explained in:
Ch 15
