Cash equivalents and Bank reconciliation

Cash equivalents and Bank reconciliation - Accounting...

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middle city Free Online Accounting Lessons Improve Your Grades --- Advance Your Career --- Achieve Success With Our Online Accounting Tutorials M E N U Home Blog Free Videos Adjusting Entries 1 Adjusting Entries 2 Product Costing Free Tutorials Introduction Financial Statements Journals Accruals Reports Merchandising Financial Assets Inventory Plant Assets Liabilities Stockholders' Equity Income and Retained Earnings Statement of Cash Flows Financial Analysis Management Accounting Job Costing Process Costing CVP Incremental Analysis Operational Budgeting Standard Costs Chapter 7 Financial Assets Bank Reconciliation Short Term Investments Accounts Receivable Uncollectible Accounts Writing Off Bad Debts Financial Analysis Chapter 7 discusses ±nancial assets: Cash, Accounts Receivable, Short Term Investments. What are fnancial assets Financial assets include Cash, and those assets that can be converted to cash in a reasonably short period of time - one year at most, but less time in many cases. We will study the following ±nancial assets: Cash Cash Equivalents Short Term Investments Accounts Receivable Valuation oF fnancial assets Financial assets are valued as of balance sheet date, when ±nancial statements are prepared. They are valued at the equivalent of their current Cash value - what they would be worth if we could convert them to cash now. In the case of Cash, it is already at it's current value. Short Term Investments are reported at their current market value. Accounts Receivable are adjusted for possible bad debts. Cash and Cash Equivalents Cash is just as the word suggests. It includes cash money including paper and coins, checks and money orders to be deposited, money deposited in bank accounts that can be accessed quickly. The term liquid refers to Cash, and the ease or dif±culty of converting an asset into Cash. Cash Equivalents are highly liquid short term investments that can be turned into Cash very quickly. These include US Treasury bills, money market accounts and high grade commercial paper . When corporations need to borrow money for a very short time, they often sell commercial paper. These come due within a few months at most, and pay a higher interest rate than other investments. Bank Reconciliation
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This note was uploaded on 05/02/2011 for the course ACC 121 taught by Professor Uru during the Spring '11 term at Briar Cliff.

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Cash equivalents and Bank reconciliation - Accounting...

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