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26 Cards in this Set
- Front
- Back
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What is Liquidity?
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A CompaniesAbility to Pay its Short Term Debt
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What are Liquid Assets?
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Cash and Similar Assets that Can be Readily Used to Pay Obligations
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What does Cash Include?
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Items Acceptable for Deposit Including Customer Checks, Cashier Checks, Certified Checks, Money Orders
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What are the Characteristics of Cash Equivalents?
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Short Term High Liquidity Investments that are: 1) Readily Converitble to a Known Cash Amount 2) Are Sufficiently Close to Due Date that their Market Value is Not Effect by Interest Rate Changes
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Name 3 General Ways to Control Cash.
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Keep Handling of Cash Seperate from Recordkeepeing
Quickly Deposit Cash Receipts Cash Disbursements are Made by Check |
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What is the Over and Short Account? On What Financial Statement is it Reported?
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Errors in Cash Exchanges go into the Over and Short Account. This is an Expense Account that Appears on the Income Statement
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What Would be Debited and Credited in a Journal Entry for Cash Overages?
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Cash - Debit
Cash Over and Short - Credit Sales Revenue - Credit |
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What Would be Debited and Credited in a Journal Entry for Cash Shortages?
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Cash - Debit
Cash Over and Short - Debit Sales Revenue - Credit |
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What are Two Highlights of the Voucher System?
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Detailed Records for Verification of all Cash Disbursements
Caseh Disbursements are Made by Check |
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What is the Journal Entry to Open Petty Cash?
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Petty Cash - Debit
Cash - Credit |
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What are the 4 Times We Will Make Journal Entries for Petty Cash?
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Open Petty Cash
Reimburse Petty Cash Increase or Decrease Petty Cash Reimburse Petty Cash for Overages and Shortages |
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What is the Journal Entry to Increase Petty Cash
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Petty Cash - Debit
Cash - Credit |
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Give a Journal Entry to Reimburse Petty Cash with a Cash Overage
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Misc. Expense - Debit
Cash Over and Short - Debit Cash - Credit |
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What are Some Ways a Bank Account Contributes to Internal Controls
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Signiture Cards, Deposit Tickets, Checks and EFT
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One the Banks Records Discuss How the Depositors Account is a Liability on the BAnks Records
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The Money Belongs to a Account Holder. When the Account Holder Makes a Deposit the Bank Records a Credit because this is a Liability.
When the Account Holder Takes Money Out the Bank The Bank Records a Debit |
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What are the 4 Items the Bank Sends to the Account Holders
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Bank Statements
Cancelled Checks Debit Memos Credit Memos |
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What are Items the Bank May Deduct from the Account Holder's Account
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Service Charges and Fees
Bounced Customer Checks Corrections of Errors ATM Withdrawals Auto Payments Set Up by Account Holder |
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What are Items the Bank May Add to the Account Holder's Account
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Collections Made by the BAnk on the Depositor's Behalf
Corrections of Errors Interest Earned |
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On the Bank Side of the Reconciliation, What Items Will be Added and Deducted from the Bank Account
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Deposits in Transit Are Added
Outstanding Checks are Deducted |
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On the Book Side of the Reconciliation, What Items Will be Added and Deducted from the Bank Account
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Collections on Notes Minus Fees - Added
Interest Earned - Added Check Printing - Deducted NFS Check - Deducted Fees- Deducted |
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How Do we Identify Outstanding Checks, Where the Account Holder Does Not have the Cancelled Checks
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We Identify Outstanding Checks by Comparing the Book Records to the Bank Statement or Previous Reconciliation. Whichever Check Numbers are Not Identified with the Cancelled Checks on the Bank Statement are Outstanding
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Book Adjustment: Give the Journal Entry for Collection on Note Receivable
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Cash - Debit
Collection Expense - Debit Notes Receivable - Credit |
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Book Adjustment: Give Journal Entry for Interest Earned
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Cash - Debit
Interest Revenue - Credit |
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Book Adjustment: Give a Journal Entry for Check Printing
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Misc. Expense - Debit
Cash - Credit |
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Book Adjustment: NFS Check
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Accn Rec. Client - Debit
Cash Credit |
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Give Formula for Days Sales Uncollect? What Does This Highlight?
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Accounts Receivable/ Net Sales x 365
It Helps us Find out How Receivables' Nearness to Cash It Shows How Much Time in Days is Likely to Pass Before Receivables Turn to Cash |
