uWorld CPA - FAR - Ch.7 - Cash and Cash Equivalents

studied byStudied by 0 people
0.0(0)
learn
LearnA personalized and smart learning plan
exam
Practice TestTake a test on your terms and definitions
spaced repetition
Spaced RepetitionScientifically backed study method
heart puzzle
Matching GameHow quick can you match all your cards?
flashcards
FlashcardsStudy terms and definitions

1 / 10

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

11 Terms

1

One example of a cash equivalent is a financial instrument that has an original maturity of ___ months or less FROM DATE OF PURCHASE

3

New cards
2

Bank Balance Adjustments

Bank statement balance

(add) Deposits in transit

(subtract) checks outstanding

(add or subtract) Bank errors

= net cash balance, must tie to book balance net cash balance




Think about: What would the bank be unaware of that the books would be aware of? (except for bank errors)

New cards
3

Book balance adjustments

Book Balance

(add) Interest paid by bank
(add) Deposits not yet recorded in book

(subtract) withdrawals not yet recorded in books
(subtract) bank charges and fees
(subtract) Returned checks, NSF

(Add or subtract) Recording errors

= net cash balance, must tie to bank balance net cash balance


Think about: what would the books be unaware of that the bank would be aware of? (except for recording errors)

New cards
4

There's cash in the bank held in relation to a short term liability.

Is this cash considered a current asset? True / False.

True. But not part of unrestricted cash balance (it's separated from cash because it's not available for use in current operations)

If held in relation to long term liability, it's non current asset. (Long term asset)

(note) A bond sinking fund indicates long term.

New cards
5

A bank is showing a negative balance through an overdraft. How is this presented?

A current liability if it's in a separate bank.

If it's with other accounts at same bank institution with positive account balances, it's netted.

New cards
6

Your year end is December 31. You receive a post dated check dated Jan 2 of the next year. Can this be considered cash?

No. Cash must be readily available for current needs without restriction limiting its use.

New cards
7

You deposit a check but it bounced as non-sufficient funds (NSF). Should you record this as cash on your books?

No. It's not readily available for current needs.

New cards
8

You write a check to pay a vendor, but haven't mailed the check out yet. Should you record this check on your books?

No, because you are still in physical control of the check. Record when you give up control (mail it out)

New cards
9

you are given the following information.

Balance per book: $9,000
balance per bank: $$11,000

Bank statement error in company favor: $1,000
Bank Fee: $1,000
Deposit received by bank directly from customer: $1,000
Check payable to vendor recorded on books but not mailed: $1,000

What's the reconciled cash balance?

$10,000

Bank recon:
$11,000 balance per bank
- $1,000 bank error
= $10,000

Book recon
$9,000 balance per book
+ $1,000deposit received direct to bank
+ $1,000 check not mailed
- $1,000 bank fee
= $10,000

New cards
10

True / False cash in bond sinking fund is reported as cash/cash equivalents.

False. Because it's designated for long-term use, it's treated as a noncurrent asset.

New cards
11

Are marketable securities cash and cash equivalent?

No.

New cards

Explore top notes

note Note
studied byStudied by 89 people
890 days ago
4.5(4)
note Note
studied byStudied by 11 people
879 days ago
5.0(1)
note Note
studied byStudied by 1 person
20 hours ago
4.0(1)
note Note
studied byStudied by 19 people
979 days ago
5.0(1)
note Note
studied byStudied by 22 people
799 days ago
5.0(1)
note Note
studied byStudied by 15 people
816 days ago
5.0(1)
note Note
studied byStudied by 11 people
965 days ago
5.0(1)
note Note
studied byStudied by 127 people
616 days ago
5.0(1)

Explore top flashcards

flashcards Flashcard (21)
studied byStudied by 5 people
635 days ago
5.0(1)
flashcards Flashcard (23)
studied byStudied by 2 people
148 days ago
5.0(1)
flashcards Flashcard (32)
studied byStudied by 26 people
391 days ago
5.0(1)
flashcards Flashcard (173)
studied byStudied by 1 person
13 days ago
5.0(1)
flashcards Flashcard (55)
studied byStudied by 14 people
760 days ago
5.0(3)
flashcards Flashcard (30)
studied byStudied by 18 people
445 days ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 7 people
361 days ago
4.0(1)
flashcards Flashcard (84)
studied byStudied by 74 people
352 days ago
5.0(1)
robot