Module 6 Flashcards
What is Cash on hand?
receipts from customers which have not yet been deposited in the bank
What is a bank reconciliation?
a schedule that accounts for all of the differences between the bank statement balance and the company’s book balance.
What is a petty cash account?
It is used to expense minor expenses
3 Major Sources of Cash for Business?
Operations, Financing and Selling Products
4 places where business spends cash?
Operation, Debt Reduction, Assets Purchase, and Owner IOUs
Adjusted Cash Balance (Formula)
Outstanding Cheques + Deposits in Transit +/- Bank Errors
How do we handle ‘Paid freight on Shipment ?
Dr Transport In, Cr Cash
How do we handle ‘Returned Items ?
Dr A/P , Cr Purchase Returns
Types of Current Assets?
Cash, A/R, Inventory (Ending), Prepaid Insurance, Anything else on Hand
Types of Long Term Assets?
Furniture, Equipment and subtract all this by depreciation
Types of Current Liabilities?
Accounts Payable and Salaries Payable
How do we calculate A/R by Direct Method?
Sales - Collections - Write Off
How do we write off asset?
Dr Bad Debt Allowance, Cr A/R
How do we record sales percentage provisions?
Dr Bad Debt Allowance Expense, Cr Bad Debt Allowace
How do we present Current Assets?
A/R minus Bad Debt Allowance
How do we issue an Interest Free Note?
Dr Notes Receivables, Cr A/R
How do we mature an Interest Free Loan
Dr Cash, Cr Notes Recivables
How do we issue interest on our Note?
Dr Interest Receivable, Cr Interest Revenue
How do we dishonor a note?
Dr Account Receivables, Cr Notes Recivables
How do we record a sold factored note?
Dr Cash, Cr Notes Receivables and Cr Interest Recivables
