FAR 3 Module 1

Question 1

define cash and cash equivalents

Answer 1

-includes currency and demand deposits with banks and/or other financial institutions
-include ST, highly liquid investments readily convertible to cash and near maturity when acquired by entity (90 days or less from purchase date) because do not have significant risk of fluctuation in value

Question 2

restricted cash

Answer 2

should be segregated from other cash

Question 3

bank reconciliations

Answer 3

reconcile ending balances per bank and books with adding and subtracting items causing differences between the two balances
-outstanding items are adjustments on bank side and adjusting journal entry info. provides adjustments on book side