Flashcards in Section 2 - Cash and Cash Equivalents & Balance Sheet Deck (10):
What does the Balance Sheet consist of?
-Statement of Financial Position
3) stockholders' equity
-divided into "current" and "noncurrent"
-Assets = Liability + Stockholders' Equity
What are Current Assets?
Assets that will be used up or converted into cash w/in ONE YEAR or the operating cycle, whichever is longer
What are Current Liabilities?
Liabilities to be settled w/in ONE YEAR or the operating cycle, whichever is longer
-income taxes payable
-current portion of LT debt
What is the most liquid asset?
-usually the first item on "current assets" of b/s
What are Cash Equivalents?
-security easily converted into cash w/in 90 days or less than 3 months
-money market funds
What are examples of Cash and Cash Equivalents?
-coin and currency on hand (petty cash)
-money market accounts
-CDs w/ an original maturity of 3 months or less
-negotiable paper (bank checks, travelers checks, money order)
What items are excluded from Cash?
-compensating balance - "legally restricted deposits", if illegal report in cash
-postdated or NSF checks --> receivables
-->same bank, net them, positive--> cash, negative --> current liability
-->different banks, positive --> asset, negative --> current liability
-->current, separate from cash
-->non-current, other assets or investment
-postage stamps - prepaid expenses under supplies
What are the steps in Bank Reconciliation?
Balance on bank statement
+deposits in transit
+-errors by bank
+amounts collected by bank
-unrecorded bank charges
+-errors made in recording transaction
What does GAAP Income Statement consist of?
-Statement of Earnings and Comprehensive Income
-State of Profit and Loss
-other income (Non-operating)
-provision for income Tax
-Income from continuing operations
-gain/loss from operations Discontinued component unit
-Other comprehensive income