F3- Cash and Cash Equivalents

Question 1

What is considered a cash equivalent?

Answer 1

3 months or less from the date of purchase

Question 2

When can you cash in checks?

Answer 2

Only on the customer posted date. Posted dates on checks are when the company can cash them in.

Question 3

How are cash in bond sinking funds considered?

Answer 3

They are not considered cash

Question 4

How are marketable equity securities considered?

Answer 4

Classified as investments not as cash

Question 5

How are depository accounts considered

Answer 5

Cash

Question 6

How are various bank accounts shown within the balance sheet

Answer 6

The bank accounts are netted together, it is important to note that if there is a negative account it has to be shown a liability within the bank statement

Question 7

What is reported as cash when there is one bank with a net positive and one with a net negative

Answer 7

The bank that has the net positive is the one that is reported as cash. IT IS NOT NETTED WITH THE NEGATIVE BANK. IT IS A STAND ALONE CASH POSITION.

Question 8

How are check disbursed treated in regards to cash at year end

Answer 8

Even if the check is recorded 12/31 if it is not disbursed than the cash is still yours at the end of the year. IF it has been removed from the bank balance than it is an addback.

Question 9

What are the only two RECONCILING items when doing a bank rec

Answer 9

deposits in transits and checks outstanding

Question 10

How can double counting happen for checks disbursed in a bank rec?

Answer 10

During a bank rec: When an outstanding check is cleared the following month. For that amount it has to be reduced on current month disbursements.