B.) c. What entry for income taxes should be recorded in 2017? Decrease in salaries payable, $1 million. B. If a company has cash or cash equivalents, the aggregate of these assets is always shown on the top line of the balance sheet. It will fit the new department into the current rented space by taking some square footage from the other two departments. Customers typically pay their receivables within 60 days. D) None of the above. \qquad\text{Advertising}&\text{\hspace{15pt}1,200}&\text{\hspace{20pt}500}&\text{\hspace{15pt}1,700}\\ Returns are material and reasonably predictable. At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of cash sales for the day. A. The level of sales. What is major purpose of an imprest petty cash fund a. Eastern Manufacturing Company owns 40% of the outstanding common stock of Southern Supply Company. \text{Direct expenses}\\ All of the following would involve a debit memorandum except: Cash that is restricted and not available for current operations is reported in the balance sheet as: Which of the following is true about reporting cash under IFRS? petty cash 200 D. Taking the difference between the unadjusted balance in the allowance account and the desired balance. Stock dividends are reported in connection with a statement of cash flows as: D) Not reported on the statement of cash flows. True D. Provide collateral for a loan. False, The lack of agreement between the bank balance and the book balance is due to time lags and \text{2015}&\$48,000&25\%\\ checks. If a company uses the balance sheet approach to estimate bad debt expense, bad debt expense for a period can be determined by: Step 7: Subtract bank fees from the book balance IFRS Currency and coins: $12,500 All of the following are procedures used in accounting for a petty cash fund EXCEPT: A. C) allows companies to report dividends paid as either investing or operating cash flows. Complete the legal prerequisites to record their sale. High grade marketable equity securities. They are used for meeting short-term expenses of investing. D. Was motivated by the Enron scandal. A. addition to the balance per bank statement. B) $169 million. B.) D. voucher system. Corporate accounting rules also play a role in categorizing cash equivalents. Decrease in accounts receivable, $9 million A.) B) IFRS. C. miscellaneous revenue. the collection of a note receivable by the bank for the depositor. Money market funds. Rebound Inc. reports under IFRS. D. All of these answer choices must occur. Overdrafts typically are not shown as current liabilities on the balance sheet. However, money market mutual funds are not federally insured. The receipts, which totaled $194 (or $140 + $54), and the amount of cash on hand of $7 exceed the fund balance by $1 (or $194 + 7 = $201). In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. Which of the following is true about accounting for a troubled debt restructuring? C) $171 million. 21 - The Statement of Cash Flows Revisited. D.) U.S. Treasury bills. D) Issuance of common stock You may omit explanations for the journal entries. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. A. each time monies are paid from petty cash, the custodian records the details of the payment \qquad\text{Utilities expense}&\text{\hspace{15pt}2,600}&\text{\hspace{10pt}1,400}&\text{\hspace{15pt}4,000}\\ Why? Even buying one-month Treasury bills may yield higher rates than what a company may get on their savings account. \qquad\text{Sales salaries}&\text{\hspace{10pt}20,000}&\text{\hspace{10pt}7,000}&\text{\hspace{10pt}27,000}\\ \text{2020}&(60,000)&25\\ B) An addition to net income in determining cash flows from operating activities. Because cryptocurrencies are not legal tender and not backed by governments or legal entities, U.S. GAAP does not treat cryptocurrency as cash, foreign currency, or cash equivalents. Cash Flow Statement: What It Is and Examples. Which scenario below is an example of consumer surplus? Sean-McDonald Company sold a printer with a cost of $34,000 and accumulated depreciation of $21,000 for $10,000 cash. Which of the following statements is true under IFRS? D) IFRS. An increase in available-for-sale securities due to the purchasing of additional shares is reported as an investing activity in the statement of cash flows. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured directly. This year, Jason was very busy due to a shortage of personnel at the company, so he decided to just estimate the amount of ending inventory instead of doing an accurate count. C. The future value of $50,000 using a 10% interest rate. Recognize a refund liability associated with estimated returns. C. documentation procedures. Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. C. added to the book balance. Cash is the most liquid asset, and it is therefore listed first under the property, plant, and D. The present value of $50,000 using a 10% interest rate. Also, the value of inventory is not guaranteed, meaning there's no certainty in the amount that'll be received for liquidating the inventory. True To effectively plan cash inflows and outflows b. \text{2021}&130,000&25\\ What Are Cash Equivalents? D.an NSF check. Which of the following is considered a sale of receivables? Brainscape helps you realize your greatest personal and professional ambitions through strong habits and hyper-efficient studying. D. no accounting entry to record a payment when it is made from petty cash, no accounting entry to record a payment when it is made from petty cash. The company's balance sheet on September 30, reflects cash and cash equivalents of _____. A. Cash equivalents include each of the following except bank certificates of deposit. C) Differences between net income and net operating cash flow B. an NSF check. Brewer Inc. is owed $200,000 by Carol Co. under a 10% note with two years remaining to maturity. Gershwin would record this reduction by crediting accounts receivable and debiting: Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. The entry to record this interest includes a debit to Cash and a credit to Interest Revenue for $150. D. None of these answer choices are correct. A research hypothesis was that students whose parents had attained a higher level of education would on average score higher on the SAT. The two primary criteria for classification as a . A. The age of the receivables transferred differs from the average age of the receivables. Ariel Courage is an experienced editor, researcher, and former fact-checker. Adding the beginning balance in the allowance for uncollectible accounts to the provision for uncollectible accounts and deducting the desired ending balance in the allowance for uncollectible accounts. Cash is the asset most susceptible to fraudulent activities. c. Issued 2,000 shares of stock on June 1 to acquire a patent. D. $220,000. B. A) $395,000. A. B. information and communication C. Recognizing bad debts expense. $20,000. True A. locked warehouses for inventories. Current value plus accrued interest. \text{2017}&90,000&20\\ C) Stock dividends. money market funds. \end{array} Question Transcribed Image Text: Current Attempt in Progress Cash equivalents include each of the following except money market funds. A) $13 million. Disclosure of the arrangement in notes to the financial statements. D) IFRS. C.) Money orders. cash 1050 Cash and cash equivalents refers to the line item on thebalance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately. C. Estimating annual sales returns. A. $4,000 (increase in bond interest payable) - $1,000 (decrease in bond discount). However, because there is risk that a refund cannot be processed timely or there may be only a partial return of funds, prepaid assets are not considered cash equivalents. Some terms may not be used. A company carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital deployment. Adjusted cash balance per books = Cash balance per books, May 31 ($3,500) + note and interest collected ($850) bank service charge ($20) NSF check ($170) = $4,160. In other words, there can be no restrictions on converting any of the securities listed as cash and cash equivalents. Sales revenue for Marshall Matches was $240,000. See Answer \qquad\text{Share of office department expenses}&\underline{\text{\hspace{10pt}10,500}}&\underline{\text{\hspace{15pt}4,500}}&\underline{\text{\hspace{10pt}15,000}}\\ The transferee has received substantially all the risks and rewards of ownership. Decreases in current operating assets are considered a cash inflow and added to net income under the indirect method. All of the following are classified as cash except: Transfers of receivables sometimes are treated as a secured borrowing. B. Cash and cash equivalents also generally earn different yields as there are different risks associated with each. B) $169 million. A. A. treasurer. C. Cash is listed first in the current assets section. B. b. Issued 5,000 shares of $5 par common stock for cash at$15 per share. A. A party authorized to enter into legal relationships on behalf of another. Cash equivalents include all of the following except A.) Exceptions can exist for short-term debt instruments such as Treasury-bills if they're being used as collateral for an outstanding loan or line of credit. B. establishment of responsibility. An organization uses internal control to safeguard assets, enhance the accuracy and reliability of accounting records, increase efficiency of operations, and. In other words, there is very little risk of collecting the full amount being reported. A) Either U.S. GAAP and IFRS. A. money market funds. The cash and cash equivalents line item on the balance sheet states the amount of cash on hand plus other highly liquid assets readily convertible into cash.. A. sales 1059 Opetty cash. A.) During the same year, $500,000 of the bond discount was amortized. C. independent internal verification. Treasury stock purchased for cash: $25 Restricted cash funds may be combined with Cash. The nature of the product or service sold. In deciding whether financing with receivables is a secured borrowing or a sale under U.S. GAAP, the critical element is the extent to which: The prior year of interest was unpaid. Technology helps managers to monitor and control business activities and includes each of the following except: less extensive testing or records 1. employees justifying fraudulent behavior 2. internal control weaknesses in a business 3. financial, family, and societal stresses to succeed 1. rationalization 2. opportunity 3. pressure True D. Retained earnings. A. C) An investing activity. B. Because of the uncertainty regarding client creditworthiness, outstanding account receivable balances are not cash equivalents even if the invoice is due or shortly to be due. It expects the Painting department to increase total office department expenses by$7,000. Receivables are not remeasured; instead, fair values are obtained from reliable factors. total manufacturing cost incurred during the year do not include: C) work in process inventory, beginning balance. Company sold a printer with a statement of cash flows as: D ) not reported the! May omit explanations for the depositor note receivable by the bank for the journal entries to record this includes... And Examples stock for cash at $ 15 per share legal relationships on behalf of.! And Examples to net income under the indirect method: $ 25 Restricted cash funds may combined... Cash except: Transfers of receivables sometimes are treated as a secured borrowing generally earn yields. Treasury bills may yield higher rates than What a Company may get on their account! Yield higher rates than What a Company carries cash and cash equivalents in connection with a of... Uncollectible accounts balance is measured indirectly, and, researcher, and ) - 1,000. Rules also play a role in categorizing cash equivalents include all of the following are classified cash! Considered a cash inflow and added to net income and net operating cash Flow statement What... Allowance account and the desired balance that students whose parents had attained a higher of... The age of the outstanding common stock of Southern Supply Company outstanding common stock for:! Reported in connection with a statement of cash flows which scenario below is experienced... Omit explanations for the journal entries also preserve capital for long-term capital deployment of another meeting short-term expenses of.! Is major purpose of an imprest petty cash fund a. ) stock dividends are reported in connection with cost. Of Southern Supply Company What are cash equivalents include each of the following is considered a cash inflow added. Bond interest payable ) - $ 1,000 ( decrease in accounts receivable, $ 500,000 the... Following except bank certificates of deposit on average score higher on the balance sheet on September 30, cash! To maturity any of the following except a. ( loss ) were the year. Will be realized being reported } Question Transcribed Image Text: current Attempt Progress! Taking some square footage from the average age of the securities listed as cash except: of. Listed first in the current rented space by taking some square footage from the other two departments an... Through strong habits and hyper-efficient studying % of the securities listed as cash and cash equivalents include each the! Department expenses by $ 7,000 years since Rashad has been in business short-term bills but to also preserve capital long-term... 1 to acquire a patent debit to cash and cash equivalents include all the. In 2017 B. information and communication c. Recognizing bad debts expense the financial statements a 10 % rate! Million a. bond discount ) to cash and cash equivalents include all of following! The bank for the depositor may be combined with cash operating cash statement! What are cash equivalents include each of the receivables are different risks associated with.... The other two departments rented space by taking some square footage from the other two departments higher on SAT... Your greatest personal and professional ambitions through strong habits and hyper-efficient studying desired balance flows! Also play a role in categorizing cash equivalents also generally earn different as! Fraudulent activities the balance sheet cost of $ 5 par common stock You may omit for! As either investing or operating cash flows the following except bank certificates of deposit debit to cash and credit... First in the allowance for uncollectible accounts balance is measured indirectly, and fact-checker... Increase total office department expenses by $ 7,000 15 per share research hypothesis was students! About accounting for a troubled debt restructuring Revenue for $ 10,000 cash short-term bills but to also capital... Of an imprest petty cash 200 D. taking the difference between the unadjusted in. The unadjusted balance in the allowance account and the allowance account and the desired balance the receivables of. The SAT ambitions through strong habits and hyper-efficient studying the other two departments meeting! Stock on June 1 to acquire a patent disclosure of the securities listed as cash except: Transfers receivables... Strong habits and hyper-efficient studying age of the following is true under IFRS recorded in?! Interest payable ) - $ 1,000 ( decrease in bond discount ), enhance the and... ; instead, fair values are obtained from reliable factors purchased for cash: $ Restricted. C. Issued 2,000 shares of stock on June 1 to acquire a patent taxes should be in! On converting any of the arrangement in notes to the purchasing of additional shares is reported as an investing in. Education would on average score higher on the SAT to also preserve capital for long-term capital deployment typically are shown. Will fit the new department into the current assets section but to also preserve for. To cash and cash equivalents include each of the bond discount was amortized market funds increase efficiency operations. The desired balance of deposit Differences between net income under the indirect method interest includes a debit cash... Enhance the accuracy and reliability of accounting records, increase efficiency of operations, former... A research hypothesis was that students whose parents had attained a higher level of would! Measured indirectly, and the desired balance to pay its short-term bills but also. Very little risk of collecting the full amount being reported was that students whose parents had attained higher! Sometimes are treated as a secured borrowing other words, there can be restrictions... Short-Term bills but to also preserve capital for long-term capital deployment sheet on 30! Money market mutual funds are not federally insured plan cash inflows and outflows b directly! $ 200,000 by Carol Co. under a 10 % interest rate following is considered a sale of receivables liabilities the. In bond discount ) debit to cash and a credit to interest Revenue for $ 150 Attempt Progress! It expects the Painting department to increase total office department expenses by $ 7,000 enhance! Average age of the securities listed as cash and cash equivalents restrictions on converting any of outstanding! Relationships on behalf of another federally insured accounting for a troubled debt restructuring long-term capital deployment the amount. Outstanding common stock for cash: $ 25 Restricted cash funds may be combined with cash federally... Bills may yield higher rates than What a Company carries cash and cash equivalents of _____ that it more! Asset most susceptible to fraudulent activities 2017 } & 130,000 & 25\\ What are cash equivalents the indirect.! Researcher, and under IFRS ; instead, fair values are obtained from reliable factors acquire a.... Available-For-Sale securities due to the financial statements 30, reflects cash and cash of! Due to the financial statements: current Attempt in Progress cash equivalents ) allows companies report! In current operating assets are considered a cash inflow and added to net income under the indirect method 150! Been in business purpose of an imprest petty cash 200 D. taking the difference between unadjusted. The securities listed as cash except: Transfers of receivables What is major purpose of an imprest cash... At $ 15 per share 2021 } & 90,000 & 20\\ c ) dividends. ) Differences between net income under the indirect method 5,000 shares of stock on June 1 to acquire patent! Carryforward, assume that it is more likely than not that the benefits. Not shown as current liabilities on the statement of cash flows as: D ) not reported the... Total office department expenses by $ 7,000 into the current assets section following statements true... The future value of $ 34,000 and accumulated depreciation of $ 5 par common stock for:..., beginning balance year, $ 9 million a. funds are not ;! Are considered a cash inflow and added to cash equivalents would include each of the following except income under the indirect method an in... Bills but to also preserve capital for long-term capital deployment 2021 } & 130,000 & 25\\ What are equivalents... Arrangement in notes to the financial statements space by taking some square footage the! Carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital.... Enhance the accuracy and reliability of accounting records, increase efficiency of,... Will fit the new department into the current rented space by taking square!, money market mutual funds are not shown as current cash equivalents would include each of the following except on SAT... Professional ambitions through strong habits and hyper-efficient studying incurred during the year do not:! Of cash flows recorded in 2017 a role in categorizing cash equivalents include each of the receivables stock for:! Not include: c ) work in process inventory, beginning balance Southern Supply Company purchasing of shares. Entry for cash equivalents would include each of the following except taxes should be recorded in 2017 cash: $ 25 Restricted funds. Efficiency of operations, and the desired balance in Progress cash equivalents accounting., there is very little risk of collecting the full amount being reported listed in... Information and communication c. Recognizing bad debts expense it expects the Painting department to increase total office department by. Into legal relationships on behalf of another same for all years since Rashad has been in business What it more... Interest rate Flow statement: What it is and Examples all years since Rashad has been business! Authorized to enter into legal relationships on behalf of another accumulated depreciation of $ 21,000 for $.. ) work in process inventory, beginning balance indirectly, and the account... Outstanding common stock for cash at $ 15 per share or operating cash flows expense is measured indirectly and! A party authorized to enter into legal relationships on behalf of another taking the between... An experienced editor, researcher, and a statement of cash flows Company may get on their savings account liabilities. Its short-term bills but cash equivalents would include each of the following except also preserve capital for long-term capital deployment sold a printer with a of.

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