UNFINISHED Chapter 7 - Cash and Receivables

Cash

Currency and coins, balances in checking accounts, and items acceptable for deposit in these accounts, such as checks and money orders received from customers

Cash Equivalents

Include money market funds, treasury bills, and commercial paper; investments that have a maturity date no longer than three months from the date of purchase

Internal Control

A company’s system to encourage adherence to company policies and procedures, promote operational efficiency, minimize errors and theft, and enhance the reliability and accuracy of accounting data

Separation of Duties

An internal control technique in which various functions are distributed amongst employees to provide cross-checking that encourages accuracy and discourages fraud

Compensating Balance

Specified balance (usually some percentage of the committed amount) a borrower of a loan is asked to maintain in a low-interest or noninterest-bearing account at the bank

Receivables

A company’s claims to the future collection of cash, other assets, or services

Accounts Receivable

Amounts to be received from the sale of goods or services on account