NOTES AND ASSESSMENT
Practical Accounting 1
CASH AND CASH EQUIVALENTS
Intermediate Accounting 1
PROBLEMS
1.
Practical Accounting 1
MULTIPLE CHOICES
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Misunderstood post-dated check recipient (entity)
Cash in bank (checkbook/bank statement)
Check
Check
Total Cash; ‘Cash’ must be unrestricted; Compensating Balance (shortterm/unrestricted) is part of cash, otherwise, a separate line item
Check
Check; computation
Outstanding check are deducted from bank statement
Deposit in a closed bank is not included
Unrestricted Cash is cash, in general; includes traveler’s check, money
order
Misunderstood post-dated check date
Misunderstood problem: the book balance does not include all following
items but it was rather additional information; return value is a
refundable deposit; replenishment check
Misunderstood question; check drawn to the order of custodian is part
of cash
Check
Cash in Bank set aside for land acquisition is not part of cash and cash
equivalents; any time-unspecified cash equivalents are a cash
equivalent
Misunderstood ‘cash receipts journal was held open until’
Offset overdraft in same bank/ accounts
Check; computation
Check; Certificate of deposit is a cash equivalent
BANK RECONCILIATION