Chapter 7 (part 2) Flashcards Preview

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Flashcards in Chapter 7 (part 2) Deck (13):
1

What is included in cash?

-checking accounts, cash on hand, and petty cash


-treasury bills
-commercial paper
-money market


Restricted Cash
-separate account but still an asset

2

Bank Reconciliation Points

-done on timely basis (preferably monthly)
- an internal control procedures
-probably will need to make journal entries




-to record revenues and expenses in proper period and to correctly state cash to reflect timing difference and any errors

3

Banking Statement Treatment


-By Bank


-By Us

-treated as liability


-treated as liability

4

Electronic Funds Transfer

-online paying and receiving money

5

Deposit in Transit

business made deposit at bank,recorded it in their records but it is not yet on the banks records

6

O/s Check

business has written and recorded check but it has not yet cleared their bank account. Clearing means that the bank has provide the money to payee(holder) and deducted from the (payor(maker)

7

NSF

-non-sufficient funds

-bouncing a check

8

Entry for Deposit

Dr:Cash

Cr: Accounts Receivable

9

when returned NSF entry

Dr: Accounts Receivable

Cr: Cash

10

Line of Credit

Pre-established loan that will back up your checking account in case you need funds quickly


-write a check to draw on

11

The Procedure

check handout

12

When are you said to be in balance or reconciled

when 2 adjusted book balances equal

-then add to all other types of cash accounts

13

petty cash

cash used to pay relatively small amounts