Slide 7-1,FINANCIAL ASSETS,Chapter7,Slide 7-2,How Much Cash Should a Business Have?,Cash and cash Equivalents 现金与现金等价物,Short-term Investments,Receivables,Financial Assets,Cash and those assets that can be easily and directly converted into cash,Slide 7-3,How Much Cash Should a Business Have?,Accounts receivable,Marketable securities 有价证券 (short-term investments),Cash (and cash equivalents),Collections from customers,Cash payments,“Excess” cash is invested temporarily.,Investments are sold as cash is needed.,Slide 7-5,Cash(现金),Coins and paper money,Checks(支票),Money orders 汇票/汇款单,Travelers checks,Bank credit card sales,Cash is defined as any deposit banks will accept.,Slide 7-6,Combined with cash on balance sheet,Reporting Cash in the Balance Sheet,Liquid short-term investments,Stable market values,Matures within 90 days of acquisition,Money market funds 货币市场基金 T-bills High-grade commercial paper,Slide 7-7,Not available for paying current liabilities,Reporting Cash in the Balance Sheet,Not a current asset,Listed as an investment and funds,“Restricted” Cash受限制现金,Slide 7-8,Bank agrees in advance to lend money.,Reporting Cash in the Balance Sheet,Liability is incurred when line of credit is used.,Unused line of credit is disclosed in notes.,Lines of Credit 信用限额,Slide 7-9,Cash Management,Accurately account for cash. Prevent theft and fraud. Assure the availability of adequate amounts of cash. Avoid unnecessarily large amounts of idle cash.,Slide 7-10,Using Excess Cash Balances Efficiently,Cash available for long-term investment may be used to finance growth and expansion of the business, or to repay debt.,Cash not needed for business purposes should be distributed to the companys stockholders.,Slide 7-11,Internal Control Over Cash Segregate authorization, custody and recording of cash. Prepare a cash budget. Prepare a control listing of cash receipts. Require daily deposits. Make all payments by check. Verify every expenditure before payment. Promptly reconcile bank statements.,Slide 7-12,Cash Over and Short现金溢缺,Cash Over and Short is debited for shortages and credited for overages.,On May 5, XBAR, Inc.s cash drawer was counted and found to be $10 over.,Slide 7-13,Cash disbursement,Checking account/cheque account 支票账户 - An account with the bank against which one can draw checks for payments - signature card 印鉴卡 Practice: Issuing a check (with sample checks),Slide 7-14,Slide 7-15,Cash disbursement,Cash disbursement,Slide 7-16,Slide 7-17,Bank Statements银行对账单/银行结单,Shows the beginning bank balance, deposits made, checks paid, other debits and credits in the month, and the ending bank balance. Example on page 269.,Bank Statement,Slide 7-18,Bank Reconciliation Statement银行存款余额调节表,Explains the difference between cash reported on bank statement and cash balance in depositors accounting records.,Provides information for reconciling journal entries.,Slide 7-19,Reconciling the Bank Statement,Balance per Bank,+ Deposits in Transit 在途存款,Outstanding Checks 未兑现支票, Bank Errors,= Adjusted Balance,Balance per Depositor,+ Deposits by Bank ( eg. interest earned) (credit memos),- Service Charge NSF Checks存款不足支票(debit memos), Book Errors,= Adjusted Balance,Slide 7-20,Reconciling the Bank Statement,All reconciling items on the book side require an adjusting entry to the cash account.,Balance per Depositor,+ Deposits by Bank ( e g. interest earned) (credit memos),- Service Charge NSF Checks (debit memos), Book Errors,= Adjusted Balance,Slide 7-21,Reconciling the Bank Statement Example,Prepare a July 31 bank reconciliation statement and the resulting journal entries for the Simmons Company. The July 31 bank statement indicated a cash balance of $9,610, while the cash ledger account on that date shows a balance of $7,430. Additional information necessary for the reconciliation is shown on the next page.,Slide 7-22,Outstanding checks totaled $2,417. A $500 check mailed to the bank for deposit had not reached the bank at the statement date. The bank returned a customers NSF check for $225 received as payment of an account receivable. The bank statement showed $30 interest earned on the bank balance for the month of July. Check 781 for supplies cleared the bank for $268 but was erroneously recorded in our books as $240. A $486 deposit by Acme Company was erroneously credited to our account by the bank.,Slide 7-23,Reconciling the Bank Statement Example,Reconciling the Bank StatementExample,Slide 7-24,Reconciling the Bank Statement Example,Slide 7-25,Used for minor expenditures.,Petty Cash Funds零用现金基金,Has one custodian.,Replenished periodically.,Petty Cash Funds,Slide 7-26,Petty Cash Fund,Establishing the petty cash fund Petty cash fund 500 Cash 500 Reimbursing/replenishing the petty cash fund (Miscellaneous) Expenses 300 Cash 300,Slide 7-27,Practice,Exercise 7.5 (p.304),Slide 7-28,Short-Term Investments(短期投资),Bond Investments,Capital St