Will result in an adjusting entry by the depositor is

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Unformatted text preview: sement systems that uses wire, telephone, or computers to transfer cash balances between locations. SO 5 Prepare a bank reconciliation. 7-40 Reporting Cash Reporting Cash Most liquid asset, listed first. Illustration 7-11 Cash equivalents 7-41 Restricted cash SO 6 Explain the reporting of cash. Reporting Cash Reporting Cash Review Question Which of the following statements correctly describes the reporting of cash? a. Cash cannot be combined with cash equivalents. b. Restricted cash funds may be combined with Cash. c. Cash is listed first in the current assets section. d. Restricted cash funds cannot be reported as a current asset. 7-42 SO 6 Explain the reporting of cash. Managing and Monitoring Cash Managing and Monitoring Cash Basic Principles of Cash Management Illustration 7-13 7-43 SO 7 Discuss the basic principles of cash management. Managing and Monitoring Cash Managing and Monitoring Cash Cash Budget ► Shows anticipated cash flows, usually over a one- to two-year period. ► Contributes to more effective cash management. 7-44 SO 8 Identify the primary elements of a cash budget. Appendix Operation of the Petty Cash Fund Petty Cash Fund - Used to pay small amounts. Involves: 1. establishing the fund, 2. making payments from the fund, and 3. replenishing the fund. 7-45 SO 9 Explain the operation of a petty cash fund. Operation of the Petty Cash Fund Operation of the Petty Cash Fund Illustration: If Laird Company decides to establish a $100 fund on March 1, the entry is: March 1 Petty cash Cash 7-46 100 100 SO 9 Explain the operation of a petty cash fund. Operation of the Petty Cash Fund Operation of the Petty Cash Fund Illustration: On March 15 the petty cash custodian requests a check for $87. The fund contains $13 cash and petty cash receipts for postage $44, supplies $38, and miscellaneous expenses $5. The entry is: March 15 Postage expense 44 Supplies 38 Miscellaneous expense Cash 7-47 5 87 SO 9 Explain the operation of a petty cash fund. Operation of the Petty Cash Fund Operation of the Petty Cash Fund Illustration: Assume in the preceding example that the custodian had only $12 in cash in the fund plus the receipts as listed. The request for reimbursement would therefore be for $88. The entry is: March 15 Postage expense 44 Supplies 38 Miscellaneous expense 5 Cash over and short 1 Cash 7-48 88 SO 9 Explain the operation of a petty cash fund....
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