A. an addition to the balance per depositor's records. A. Opetty cash. All of the following can be classified as cash and cash equivalents, except * a. "Statement of Financial Accounting Standards No. A. establishment of responsibility. A Restricted cash. Each transferee has the right to pledge or exchange the assets it received. 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. B. Taking the difference between the unadjusted balance in the allowance account and the desired balance. A.) What Are Cash Equivalents? D. Peecher would multiply sales revenue by the effective interest rate to determine interest revenue each period. dividing accounts receivable by net credit sales and multiplying by 365. to safeguard its assets and to enhance the accuracy and reliability of its accounting records. Enterprise Value (EV) Formula and What It Means, Statement of Financial Accounting Standards No. Accounting for the pledging of accounts receivable as collateral for a loan requires: The lack of agreement between the bank balance and the book balance is due to time lags and errors. A. added to the bank balance. B. The bank statement included interest earned. A note receivable Mild Max Cycles discounted with recourse was dishonored on its maturity date. A company can report interest received and dividends received as investing activities using The assets considered as cash equivalents are those that can generally be liquidated in less than 90 days, or 3 months, under U.S. GAAP and IFRS.. C. Rebound should recognize an increase in 2017 net income of $50,000. Cash cannot be combined with cash equivalents. In Note 3 to its financial statements, Apple provides a substantial amount of information regarding what comprises this cash and cash equivalent balance. D. deduction from the balance per depositor's records. A. combining of duties. 1817. B. Issued 7,000 shares of common stock on May 1 to acquire a factory building from Barkley Company. addition to the balance per depositor's records. Then calculate the overtime rate (time and a half) for each employee. called cash equivalents. Companies must file financial statements with the Internal Revenue Service. A. A) was $17 million. A. Williams Company began operations in January 2019 with two operating (selling) departments and one service (office) department. \end{array} Selected information from Phillips Corporation's accounting records and financial statements for 2016 is as follows ($ in millions): B) $397,000. C. Dishonored note expense. B. Step 6: Add any unrecorded interest earned to the book balance. IFRS defines cash as cash on hand and demand deposits. Discounted at an imputed interest rate. c. Issued 2,000 shares of stock on June 1 to acquire a patent. OU.S. &\underline{\hspace{2pt}\text{Income (Loss)}\hspace{2pt}}&\underline{\hspace{2pt}\text{Tax Rate}\hspace{2pt}}\\ Cash interest paid to bondhodlers: $35 Cash equivalents include all of the following 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? cash 200 Disclosure of the arrangement in notes to the financial statements. A demand deposit is a type of account from which funds may be withdrawn at any time without having to notify the institution. \text{Direct expenses}\\ D. Receivables are never settled outright at the time of a restructuring. an invoice approval initiates the recording of a purchase. A secured borrowing. On a bank reconciliation, collection of a note receivable by the bank is, If a check written and paid by the bank for $638 is incorrectly recorded on the companys books at $683, the appropriate treatment on the bank reconciliation would be to, [In this situation, the companys Cash account has been understated due to the error. Even buying one-month Treasury bills may yield higher rates than what a company may get on their savings account. B. Peecher would debit interest revenue over the life of the note. C. documentation procedures. C. Cash is the most liquid asset, and it is therefore listed first under the property, plant, and B)shoes and apparel Sales revenue for Marshall Matches was $240,000. I & =30 \\ B.) False, A company records each reconciling item used to determine the adjusted cash balance per books. \qquad\text{Store supplies used}&\text{\hspace{24pt}900}&\text{\hspace{20pt}400}&\text{\hspace{15pt}1,300}\\ C) U.S. GAAP. A. establishment of responsibility. petty cash 200 A bank makes credit entries into a depositor's account for all of the following EXCEPT: Accounts receivable. It will fit the new department into the current rented space by taking some square footage from the other two departments. A. automated system. A. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured indirectly. D) $245,000. Currency from foreign countries must be translated to the reporting currency for financial reporting purposes. Which of the following is a correct statement regarding control of over-the-counter cash receipts: The supervisor should compare the register transactions with the cash receipts report to make sure that both are correct. Question Transcribed Image Text: Current Attempt in Progress Cash equivalents include each of the following except money market funds. The accounts receivable balance will increase. A bank issues a debit memorandum to notify a depositor of: Select the items below which must be adjusted to the book balance: book error Credit deferred interest expense for $25,000. E) Cement, investing activities do not include C. The future value of $50,000 using a 10% interest rate. Removal of the pledged receivables from current assets and including them with noncurrent investments. A) $395,000. A. addition to the balance per bank statement. Cash equivalents must also be able to be liquidated to cash; for this reason, cash equivalents often have active markets. C. The transferor of the receivable surrenders control over the assets transferred. False, The lack of agreement between the bank balance and the book balance is due to time lags and X & =80 \\ Cash equivalents include all of the following except A.) The company allocates office department expenses to the operating departments in proportion to their sales. deposits in transit $1 (decrease in salaries payable) + $20 (depreciation expense). A. risk assessment C. Cash overdrafts are not allowed. 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. B. B. cash balance according to the depositor's records. G & =50 \\ These instruments can easily be converted to cash but are classified differently because they are not actual claims of ownership of cash. B. A. On April 1, Troubled would: B) An investing activity. C. a debit to various expense accounts. 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 flows from operating activities = $140 + $1 (amortization of patent) + $9 (decrease in accounts receivable) ? If Jason underestimates the dollar amount of ending inventory, what effect will it have on net income for the current accounting period? B. D. The present value of $50,000 using a 10% interest rate. e. money market funds. D. a liability on the balance sheet. Cash paid to retire bonds: $30 B. an addition to the balance per bank statement. The accounts receivable balance will decrease. Accounts receivable. A. Related information follows: The entry to replenish the fund would, [The correct journal entry would be to debit the related expense accounts for the receipts, $190, debit Cash Over and Short, $5 ($195 - $190) and credit cash, $195], Making payments from a petty cash fund requires. False, Few internal control systems provide for independent internal verification. C. If a receivable is continued, but with modified terms, a loss is typically recorded. The investment must be short term, usually with a maximum investment duration of three months or less. \qquad\text{Utilities expense}&\text{\hspace{15pt}2,600}&\text{\hspace{10pt}1,400}&\text{\hspace{15pt}4,000}\\ C. bank service charges. Selling (as well as buying) fixed assets are considered investing activities. B.) D. independent internal verification. A. interest earned. C. Disclosure of the arrangement in notes to the financial statements. D. automated controls. D. restricted cash. O commercial paper. D. All of these answer choices must occur. Meanwhile, cash often receives lower rates of interest in deposit accounts. ISDA. Three of the most common tools of financial analysis are: Horizontal analysis, vertical analysis, ratio analysis, The comparison of a company's financial condition and performance across time is known as, products that are in the process of being manufactured but are not yet complete are called, The ability to meet short-term obligations and to efficiently generate revenues is called. D. independent internal verification. Barkley had acquired the building in 2013 at a price of $150,000. High grade marketable equity securities. C) $171 million. Long-term notes receivable issued for noncash assets at an unrealistically low interest rate will be: 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: Returns are material and reasonably predictable. B. Collections from customers. Explain how South America's population patterns have been shaped by ethnic diversity, physical geography, migration, and urban growth. Cash equivalents are short-term, highly liquid investments with a maturity date that was 3 months or less at the time of purchase. The investment in Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close to its due date so that its market value is not sensitive to interest rate changes. A. \text{Net income}&\underline{\underline{\text{\$\hspace{5pt}22,580}}}&\underline{\underline{\text{\$\hspace{11pt}3,020}}}&\underline{\underline{\text{\$\hspace{5pt}25,600}}}\\ The indirect method for the preparation of the operating activities section of the statement of cash flows : C) report net income and than adjust it for items necessary to determine net cash provided or used by operating actvity. D. the custodian is authorized to disburse monies from the petty cash fund. Cash is obviously direct ownership of money, while cash equivalents represent ownership of a financial instrument that often ties to a claim to cash. C) An investing activity. B. deducted from the bank balance. \text{Allocated expenses}\\ D. postdated checks, Having different individuals receive cash, record cash receipts, and hold the cash is an example C. disclosed in the notes to the financial statements. In 2017 Rebound was pleased to determine that more cash flows would be received from the receivable than was previously thought, such that, if the total impairment were to be calculated in 2017, it would be estimated as $150,000 rather than $200,000. Cash and Cash Equivalents Definition. \end{array} C. debit Miscellaneous Expense for $3. D. all of the answers listed. C. $200,000. They are used for meeting short-term expenses of investing. a. \qquad\text{Advertising}&\text{\hspace{15pt}1,200}&\text{\hspace{20pt}500}&\text{\hspace{15pt}1,700}\\ Cash and cash equivalents area group of assets owned by a company. Cash dividends paid, $14 million. C) An investing activity. Cash is money in the form of currency, which includes all bills, coins, and currency notes. Management predicts that the new department will generate $50,000 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries,$8,000; advertising, $800; store supplies,$500; and equipment depreciation, $200. C. Bad debts expense. DepartmentIncomeStatements\begin{array}{c} D. Accounted for on the installment basis. D.) Cash is listed first in the current assets section. Match the term below with its correct definition. d. How should the income tax expense section of the income statement for 2017 appear? Cash and cash equivalents comprise cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes in value. B.) C. Net income is likely to decline. C) Differences between net income and net operating cash flow 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. $915. A. A. restricted cash. Typical cash flows from investing activities include each of the following except: A) Payment to acquire held-in maturity securities of other entities, except cash equivalents B) Proceeds from the sale of equipment C) Proceeds from collecting the principal amount of accounts receivable arising from customer sales D) Payment to buy intangible assets True C. bank safety deposit boxes for important papers. Which of the following is true about accounting for a troubled debt restructuring? A firm does the following: a. Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Not record sales until the right to return has expired. 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 Cash equivalents are short-term investments that can be easily liquidate, carry low risk of loss, and have active marketplaces to ensure quick transacting. The Sarbanes Oxley Act (SOX) internal control standards apply only to companies listed on the U.S. exchanges. D. safeguarding cash by using a bank as a depository. A. You may omit explanations for the journal entries. Mild Max would debit: 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. B. In addition to approximately $688 million of cash, cash equivalents and investment securities on its balance sheet, the Company also had approximately $1.4 billion of secured funding available . Currency and coins: $12,500 D. Taking the difference between the unadjusted balance in the allowance account and the desired balance. D. Bad debts expense is measured directly, and the allowance for uncollectible accounts balance is measured indirectly. C. service charges. Investment revenue received: $33 Treasury bills. Oftentimes, financial institutions will allow the CD holder to break their financial product in exchange for a forfeiture of interest (i.e. The two primary criteria for classification as a . B. each time monies are paid from petty cash, the custodian requests reimbursement. No changes for those departments gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales. Consider the following macroeconomic model: C=0.7Y+100G=50I=30X=80M=0.1Y+50\begin{aligned} B) An investing activity. $36,000. D.) U.S. Treasury bills. Dewitt Company gathered the following information in preparing its bank reconciliation on May 31: Cash balance per books, May 31, $3,500; deposits in transit, $1,150; note and interest collected by the bank, $850; bank service charge, $20; outstanding checks, $2,500; NSF check, $170. Cash equivalents have certain benefits over cash that make them better for some investors. Rebound should make a prior period adjustment of 2016 income, given that the impairment charge was in error. Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2016. B. reported as a noncurrent asset. In recording the check, the company should: A. debit Cash Short and Over for $3. However, oftentimes cash equivalents do not include equity or stock holdings because they can fluctuate in value. A. Commercial papers held and due for repayment in 90 days c. Equity investments d. A bank overdraft. Depreciation expense, $20 million. B) $55 million. B. money orders. NOT Establishment of responsibility B. Segregation of duties C. Independent internal verification D. All of these answer choices are correct. Sale of inventory on account. This transaction would be reported as: COSO defines internal control as a process, affected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in: Effectiveness and efficiency of operations. What Is a Liquid Asset, and What Are Some Examples? M & =0.1 Y+50 A. cash balance according to the bank statement. a. A receivable. A. added to the bank balance. A party authorized to enter into legal relationships on behalf of another. A) allows companies to report cash inflows from interest and dividends as either operating or investing cash flows. C) Maturity of at least 3 months. The following data are from the accounting records of Marshall: Therefore, all cash equivalents must have a known market price and should not be subject to price fluctuations. B. Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately. D. establishment of responsibility. A. a credit to Cash. GAAP requires interest payments and interest received to be reported as an operating activity. Apple classifies its broad assortment of financial instruments as cash, Level 1 instruments, or Level 2 instruments (based on how the item is valued). B. D. asset. Stock dividends do not affect assets or liabilities and are not considered investing or financing activities. C. the cost of printing checks. C) U.S. GAAP. $0. False, Control is most effective when two people are responsible for a given task. U.S. agency securities, certificate of deposit and time deposits, commercial paper, and corporate debt securities. A. The principles of internal control do not include, A. management responsibility. A) A deduction from net income in determining cash flows from operating activities. D. Credit sales in the period of the return. 3. electronic funds transfer 4. check. The current ratio is a liquidity ratio that measures a companys ability to cover its short-term obligations with its current assets. The conversion should provide results comparable to those that would have occurred if the business had completed operations using only one currency. Are big hospitals bad for you? C. the money obtained from cashing a petty cash check is given to the custodian. The prior year of interest was unpaid. The transferee has received substantially all the risks and rewards of ownership. There are some exceptions to short-term assets and current assets being classified as cash and cash equivalents. Which of the following is considered a sale of receivables? B. independent internal verification. Financial instruments are defined as cash equivalents if they are highly liquid products that have active marketplaces, are without liquidation restrictions, and are easily convertible to cash.

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