Term
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Definition
| Most liquid asset, standard medium of exchange, basis for measuring and accounting for all items, current asset. |
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Term
| What are some examples of cash? |
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Definition
| coin, currency, available funds on deposit at the bank, money orders, certified checks, cashiers checks, personal checks, bank drafts and savings accounts. |
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Term
| What are cash equivalents? |
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Definition
| short term, highly liquid investments that are both readily convertable to cash and so near their maturity that they present insignificant risk of changes in interest rates |
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Term
| What are some examples of cash equivalents? |
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Definition
| treasury bills, commercial paper, money market funds. |
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Term
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Definition
when companies segregate restricted cash from regular cash for reporting purposes.
examples include cash restricted for:
1) plant expansion
2) retirement of long term debt, and
3) compensating balances. |
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Term
how would you report these items?
Cash
Petty cash/ change funds
short term paper ( investments with maturity less than 3 months )
short term paper ( investments with maturities 3 to 12 months
postdated checks and IOU's
travel advances
postage stamps
bank overdrafts
compensating balances |
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Definition
cash- cash
petty cash and change funds- cash
investments less than 3 - cash equiv
investments 3 to 12 months - temp inv
postdated checks and IOUs- recievables
travel advances- recievables
postage stamps - prepaid expense
bank overdrafts - current liability
compensating balances- cash separetly classified as a deposit maintained as a compensating balance. |
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