Cash and Cash Equivalents Flashcards
Items to be considered in BANK RECON
- Deposit in Transit (+)
- Outstanding Checks (-)
- +/- Bank Errors
How will cash in savings account restricted for paying long-term debt be reported?
Restricted cash is presented SEPARATELY FROM CASH. Restricted cash has LIMITATIONS and is not available for general use in an entity’s operations.
Balance of Cash per books to be calculated _________
Start calculation from balance per bank
Balance sheet, Cash balance includes ____
Ending Balance per bank or BANK STATEMENT BALANCE +deposits in transit - outstanding checks
IF a company has multiple bank accounts at a single bank.
A negative net amount is not reported as cash but as a current liability (e.g. bank indebtedness, overdrawn checks).
Cash equivalents
CD, Treasury bills and money market funds.
Not part of Cash
Marketable debt and equity securities - not highly liquid
Balance per books
Cash balance per books
+ Int paid by bank
+ Deposits not yet recorded in books
- Bank Charges
- Returned Checks (e.g. for insufficient funds)
- Withdrawals not yet recorded in books
+/- Recording errors
Restricted cash account is a noncurrent asset since it is restricted use is for a bond sinking fund.
Overdrawn is a liability
Disclose in the notes to FS
Compensating balance (legally restricted, informally restricted, restricted cash
If there are 4 adjusting entries per books and 3 adjusting entries per Cash - what should be considered?
Adjusting entries per BOOKS only to be considered (e.g. 3) so the answer is 3
Are Coins and cash treated the same way as petty cash?
Yes, include in Cash and cash equivalents
Original maturity (90 days) and not the one from BS date
3 months maturity from original date of issue and not the one from BS date while calculating Cash and cash equivalents.
Restricted cash is presented separately from cash
True (It does not count under cash and cash equivalents)
