C06 - 1 Cash and Cash and Receivables Receivables C hapter...

Info iconThis preview shows pages 1–13. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1 Cash and Cash and Receivables Receivables C hapter 6 An electronic presentation by Douglas Cloud Pepperdine University 2 1. Understand the importance of cash management. 2. Prepare a bank reconciliation. 3. Discuss revenue recognition when the right of return exists. 4. Understand the credit policies relates to accounts receivable. 5. Explain the gross and net methods to account for cash discounts. Objectives Continued Continued 3 6. Estimate and record bad debts using a percentage of sales. 7. Estimate and record bad debts using an aging analysis. 8. Explain pledging, assignment, and factoring of accounts receivable. 9. Account for short-term notes receivable . 10. Prepare a proof of cash (Appendix) Objectives 4 Cash Cash is the resources on hand to meet planned expenditures and emergency situations. 5 Cash Cash Coins and currency Checking accounts Savings accounts Negotiable checks Bank drafts Included in Cash Excluded from Cash Certificates of deposit Bank overdrafts Postdated checks Travel advances Postage stamps 6 Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash and near their maturity. 7 Cash Management Immediately count the receipts (by the person opening the mail or the sales person using the cash register). Record daily all cash receipts in the accounting records. Deposit daily all receipts in the companys bank account. Control Over Receipts 8 Cash Management Make all payments by check (except petty cash items) so that a record exists for every company expenditure. Authorize and sign all checks only after an expenditure is verified and approved. Periodically reconcile the cash balance in the bank statements with the companys accounting records. Control Over Payments 9 Petty Cash First: An employee is appointed petty cash custodian. Petty Cash 500 Cash 500 A journal entry is made to record the establishment of the fund. 10 Petty Cash Second: Petty cash vouchers are printed, prenumbered, and given to the custodian of the fund. At all times the total of the cash in the fund plus the amounts of expenditure vouchers should be equal to $500 (in this case). 11 Petty Cash Third: When the amount of cash in the petty cash fund becomes low and/or at the end of accounting period,... Assume that a count at the end of the month shows $67.54 remaining in the petty cash fund. the vouchers are sorted into expense categories and the remaining cash is counted. 12 Petty Cash The sorting of vouchers indicated the following costs were incurred during the month: Office supplies $ 34.16 Postage 178.00 Transportation 132.14 Miscellaneous 83.76 Total expenses $428.06 The funds expected balance is $71.94 ($500.00 - The funds expected balance is $71.94 ($500.00 - $428.06). There is a shortage of $4.40 ($71.94 - $67.54)....
View Full Document

This note was uploaded on 02/18/2011 for the course ECON 101 taught by Professor Unknown during the Spring '10 term at University of Toronto- Toronto.

Page1 / 68

C06 - 1 Cash and Cash and Receivables Receivables C hapter...

This preview shows document pages 1 - 13. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online