Cash and Cash Equivalents Flashcards
1
Q
How do you treat negative and positive balances at the same bank
A
Net them into a liability or cash equivalent
2
Q
What main items are not considered cash
A
Legally restricted cash
CDs with original maturity >3 months
Overdrafts (liabilities)
Postdated checks (receivables)
3
Q
What cash adjustments are made to books in a bank reconciliation
A
Balance per books
Add: Notes collected by bank
Add: Interest received
Less: Bank service charges
Less: NSF checks
4
Q
What adjustment are made to bank account during reconciliation
A
Balance per bank
Add: Deposits in transit
Add: Cash on hand
Less: Outstanding checks
