Cash-Recivables007(1)

Cash-Recivables007(1) - Slide 1 CASH AND RECEIVABLES Cash...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Slide 1 7-1 CASH AND RECEIVABLES Cash - Definition - Cash Equivalents - Restricted Cash and Compensating Balances Accounts Receivable - Definition - Recognition and Valuation - Uses of AR Notes Receivable - Recognition and Reporting - Discounting a Note Receivable
Background image of page 1

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

View Full DocumentRight Arrow Icon
Slide 2 7-2 Cash and Cash Equivalents Cash and Cash Equivalents Balances in checking accounts Currency and coins Cash equivalents are short-term, highly liquid investments that can be readily converted to cash. Money market funds Treasury bills Commercial paper Cash Items for deposit such as checks and money orders from customers
Background image of page 2
Slide 3 7-3 Internal Control Internal Control Encourages adherence to company policies and procedures Promotes operational efficiency Minimizes errors and theft Enhances the reliability and accuracy of accounting data
Background image of page 3

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

View Full DocumentRight Arrow Icon
Slide 4 7-4 Internal Control Procedures Internal Control Procedures Cash Receipts Separate responsibilities for handling cash, recording cash transactions, and reconciling cash balances. Match the amount of cash received with the amount of cash deposited. Close supervision of cash-handling and cash-recording activities. Cash Disbursements Separate responsibilities for cash disbursement documents, check writing, check signing, check mailing, and record keeping. All disbursements, except petty cash, made by check.
Background image of page 4
Slide 5 7-5 Restricted Cash and Restricted Cash and Compensating Balances Compensating Balances Restricted Cash Management’s intent to use a certain amount of cash for a specific purpose – future plant expansion, future payment of debt. (Reported as non-current asset: Investments & Funds or Other assets) Compensating Balance Minimum balance that must be maintained in a company’s bank account as support for funds borrowed from the bank. as current or noncurrent . If not binding, Just footnote disclosure).
Background image of page 5

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

View Full DocumentRight Arrow Icon
Slide 6 7-6 Credit sales require: maintaining a separate account receivable account for each customer. accounting for bad debts and sales returns that result from credit sales . Amounts due from customers for credit sales. Accounts Receivable Accounts Receivable Credit sales and the resulting accounts receivable are recorded net of trade discounts, not at list price.
Background image of page 6
Slide 7 7-7 increase sales encourage early payment increase likelihood of collections Cash discounts Cash Discounts Cash Discounts
Background image of page 7

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

View Full DocumentRight Arrow Icon
Slide 8 7-8 2/10,n/30 Number of days discount is available Otherwise, net (or all) is due Credit period Discount percent Cash Discounts Cash Discounts
Background image of page 8
Slide 9 7-9 Cash Discounts Cash Discounts Sales are recorded at the invoice amounts. Sales discounts are recorded if payment is received within the discount period. Gross Method Sales are recorded at the invoice amount less the discount .
Background image of page 9

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

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/04/2011 for the course ACC 615 taught by Professor Semir during the Spring '11 term at Pace.

Page1 / 45

Cash-Recivables007(1) - Slide 1 CASH AND RECEIVABLES Cash...

This preview shows document pages 1 - 10. Sign up to view the full document.

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