Chapter 9 - Accounting For Cash Flashcards
What are credit cards
Visa/MasterCard/American Express- costs associated with this payment
What is a cash receipt
Funds taken in from business operations and include all items considered to be money
What are debit cards
Take money directly from your bank account
Mail receipt - cheque
Business that sells on credit usually receives payment from accounts receivables by cheque
Cash register receipts
Bills and cheques received from the point of sale terminal at the end of the day
When do you debut it credit “Short or Over”
If short, must debut
If over, must credit
What is petty cash
Small amount if money used to pay small expenditures (less $200)
Replenish petty cash
Step 1: petty cashier prepares a summary of charges for bills and vouchers
Step 2: petty cashier submits summary with bills and vouchers to account charges
Step 3: cheque made out to perry cash for an amount equal to the summary Of charges
Step 4: petty cashier cashed the cheque, the money is added to the petty cash box.
Step 5: accounting journal entry must be made for the cheque that was issued to replenish the petty cash
What is internal control
The set if accounting procedures established to:
• protect the assets from theft and waste
• ensure accurate accounting data
What’s a bank reconciliation
It’s a routine procedure to determine why the balance in the bank doesn’t match the balance in the books
What’s a bank reconciliation statement
Shows the causes for the differences
Operating activities
Represents cash that flows in (selling of services or goods to customers) and cash flowing out (expenses of the business) during the normal course of business
Investing activities
Investment in long term assets (property, plant, equipment)
financing activities
Both the borrowing and paying back of cash
