Cash Flashcards
1
Q
Cash and Cash Equivalents
A
Assets that are readily available and unrestricted. A business might have cash that is restricted for use, such as for a bond sinking fund, and that would not be included under “cash” on the balance sheet.
2
Q
Examples of Cash
A
Cash Coins or Currency Cash in Bank Negotiable instruments like checks Money orders
3
Q
Examples of Cash Equivalents
A
US treasury bills
Commercial paper
Money Market funds
Certificate of Deposit with maturity date less than 3 months from the date of purchase
4
Q
Reconciling bank balance to book balance
A
Bank Balance Add: Deposits in Transit Less: Outstanding checks \+/- Bank Errors \+/- Errors on ledgers = Book Balance
5
Q
Negative Balance in one bank account
A
If a company has multiple bank accounts and one bank account has a negative balance, list it as a liability/payable instead of just being netted against the other bank accounts
