Cash and Cash Equivalents

Question 1

What are the Categories of Cash?

Answer 1

Restricted or Unrestricted

Question 2

Where on the Balance Sheet should these funds be placed? Overdrawn, Sinking Fund, Operating Account?

Answer 2

Overdrawn - Current Liability
Sinking Fund - Non Current Asset
Operating - Current Asset

Question 3

Imprest cash funds include Petty Cash Funds. What are the JE to increase/replenish & Decrease the fund?

Answer 3

Increase - DR Petty Cash & CR Cash
Replenish - DR Expenses 
DR Miscellaneous other accts
CR Cash
Decrease - DR Cash & CR Petty Cash

Question 4

What is the JE if the Petty cash is not replenished?

Answer 4

DE Expenses

CR Petty Cash

Question 5

What are the differences between cash balance per bank and cash balance per books

Answer 5

Bank Errors (EBA)
Time lag differences (TLBA) - operating cash count is accurate but bank is not due to time lag
Book Errors (EBO)
Time Lag difference (TLBO) - bank statement is correct but company account is not due to time lag

TLBO and EBO differences require adjustments.

Question 6

How do you arrive at Balance per bank?

Answer 6

Balance per books
plus Deposits in Transit
minus Outstanding Checks

Question 7

How do you determine Adjusted Balance per books?

Answer 7

Bank Statement
minus charges/fees
plus Interest/receivables
plus or minus errors