C) A financing activity. each time monies are paid from petty cash, the custodian requests reimbursement. 3. electronic funds transfer B.) D. interest earned. C) was $23 million. The company's days' sales uncollected is closest to: 53.7 days Cash. Cash may not include: Foreign currency. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street. B. segregation of duties. A. Multiplying net credit sales by the bad debt experience ratio. C. Recognizing bad debts expense. Cash flows from interest received on loans are reported in the statement of cash flows as part of: does not change with changes in the volume of activity within the relevant range, A company that uses a job order costing system what entry would they make to record the flow of direct materials into production, debit finished goods inventory and credit raw materials inventory, the approprate section in the statement of cash flows for reporting the purchase of land in exchange form common stock is, schedule of noncash investing or financing activity. the balance sheet. E) Purchase of plant assets. \end{array} 0+x2e2xdx\int_0^{+\infty} x^2 e^{-2 x} d x Which of the following is true? Add any unrecorded deposits to the back balance 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.. Cash equivalents often have slightly greater yields than cash. Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). B. 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. Complete the legal prerequisites to record their sale. 21 - The Statement of Cash Flows Revisited. B The records of Mary's Shoes included the following information: sales 1059 This is because cash equivalents are part of the calculation to determine liquidity ratios. A company can report interest payments and interest received as operating cash flows using A company may report prepaid assets as part of its current asset section. Does this mean that you can shorten a hospital stay by choosing a small hospital? $20,000. A) Either U.S. GAAP and IFRS. \end{aligned} Cash and cash equivalents refer to the value of a company's assets like short-term bonds, treasury bills, commercial papers, etc. Which scenario below is an example of consumer surplus? Accounts receivable. 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. Which of the following is recorded by a credit to accounts receivable? Cash and cash equivalents area group of assets owned by a company. 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 . The listing of cash received via mail should be sent to each of the following individuals: cashier Current assets must include cash and its equivalents. B. Peecher would debit interest revenue over the life of the note. D. Credit sales in the period of the return. Cash flows from operating activities during 2016 should be reported as: A. Cash equivalents are securities maturing within 90 days or less and include commercial paper, money market funds, and U.S. Treasury bills. 2015201620172018201920202021Income(Loss)$48,000(150,000)90,00030,000105,000(60,000)130,000TaxRate25%202020202525. A. A. bookkeeper. cash 1050 However, money market mutual funds are not federally insured. Cost of Goods Sold: 400,000 Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note when an equivalent loan would carry 10% interest. item would be included on the bank reconciliation as: A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts of $192. $4,000 (increase in bond interest payable) - $1,000 (decrease in bond discount). Large companies often assign independent internal verification to the: In a bank reconciliation, deposits in transit are: The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor. D. Quasi-liability account. In addition, some money market funds may be tax-exempt or be held in tax-favorable accounts. Removal of the pledged receivables from current assets and including them with noncurrent investments. 130 Reporting Comprehensive Income," Page 6. B. Galaxy sells used videogames for cash and provides a one-week return right. A) was $17 million. C) An investing activity. C) Maturity of at least 3 months. B. b. George is willing to pay up to $20,000 for a car, but he finds one he likes for$15,000. Having different individuals receive cash, record cash receipts, and hold the cash is an example of, Large companies often assign independent internal verification to the, Controls that relate primarily to the safeguarding of assets are, The principles of internal control include all of the following except. What Are Cash Equivalents? A. It may be inefficient to sit on these resources instead of deploying them for company growth or rewarding investors with dividends. A. D. deducted from the book balance. To this, we will add the $150 interest earned and subtract the $810 book error in check #1221 ($4,900 $4,090) to determine the ending balance of $25,960. All of the following can be classified as cash and cash equivalents, except * a. C. money on hand. Cash and cash equivalents help companies with their working capital needs since these liquid assets are used to pay off current liabilities, which are short-term debts and bills. U.S. agency securities, certificate of deposit and time deposits, commercial paper, and corporate debt securities. Certificates of deposit. The company's bank reconciliation at June 30 included interest earned in the amount of $150. 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 Treasury bills. Cash flow from operations is stable. All demand account balances as of the date of the financial statements are included in cash totals. If a receivable becomes impaired, it is remeasured at the discounted present value of the cash flows that were originally expected to be collected, but at a revised discount rate. B. a bank service charge. U.S. treasury bills. How should Rebound treat this in its 2017 income statement? Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds. Cash is the direct ownership of a government-issued currency. I & =30 \\ Williams plans to open a third department in January 2020 that will sell paintings. B. the last six months of interest is foregone). O commercial paper. A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts of $190. \qquad\text{Advertising}&\text{\hspace{15pt}1,200}&\text{\hspace{20pt}500}&\text{\hspace{15pt}1,700}\\ C. disclosed in the notes to the financial statements. Cash equivalents include all of the following except: A receivable. D. Accounted for on the installment basis. Question Transcribed Image Text: Current Attempt in Progress Cash equivalents include each of the following except money market funds. B. collection of a note receivable. The company allocates office department expenses to the operating departments in proportion to their sales. The investment must be short term, usually with a maximum investment duration of three months or less. Find the most recent copy of this report, and investigate exactly how the HDI is defined and computed. Record a contra-receivable in the year of the sale. B. d. At =.05\alpha=.05=.05, what is your conclusion? The transferor of the receivable surrenders control over the assets transferred. D. None of these answer choices are correct. Restricted cash expected to be used within the next year should be A.reported as a current asset. The first sample shows the SAT math test scores for students whose parents are college graduates with a bachelor's degree. A. establishment of responsibility. Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus. High School Grads, 485487442492534533580478650526479425554410486485550515528390572578524535\begin{array}{llll}485 & 487 & 442 & 492 \\ 534 & 533 & 580 & 478 \\ 650 & 526 & 479 & 425 \\ 554 & 410 & 486 & 485 \\ 550 & 515 & 528 & 390 \\ 572 & 578 & 524 & 535\end{array} A.) C) U.S. GAAP. 2. The prior year of interest was unpaid. Translation losses from the devaluation of foreign currency are not reported with cash and cash equivalents. Why? $915. Cash interest paid to bondhodlers: $35 Are big hospitals bad for you? In the table above, the fifth column represents the value Apple assigned as cash and cash equivalents. B. Contra asset account. Gain from the sale of land and buildings: $26 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? An entity. B. A company carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital deployment. D) Issuance of common stock Returns are material and reasonably predictable. C. added to the book balance. Debit loss on sale of receivables for $25,000. Property dividends are reported in connection with a statement of cash flows as: Interest paid to bondholders is reported in connection with a statement of cash flows as: Investment revenue is reported in connection with a statement of cash flows as: On January 4, Childers Corporation issued $200 million of bonds for $193 million. Control is most effective when two people are responsible for a given task. Therefore, all cash equivalents must have a known market price and should not be subject to price fluctuations. B. However, oftentimes cash equivalents do not include equity or stock holdings because they can fluctuate in value. See Answer C. the money obtained from cashing a petty cash check is given to the custodian. debit Cash Short and Over for $3 A. The level of sales. B) An addition to net income in determining cash flows from operating activities. C) $171 million. Understanding Cash and Cash Equivalents (CCE), Real-World Example of Cash and Cash Equivalents. Overdrafts typically cannot be offset against positive balance in other cash accounts on the balance sheet. 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. Journal entries are required by the depositor for all of the following except: C. Factoring receivables without recourse. During 2016, Eastern received a $50 million cash dividend from Southern. d. Tom usually charges $75/hour but in certain cases is willing to go as low as$65/hour. Issued 5,000 shares of $5 par common stock for cash at$15 per share. B.) The net income for World Class Corporation was $140 million for the year ended December 31, 2016. D) $105 million. Restricted cash. Debt instruments, whether issued by a government or corporation, is tied to the health of that entity with no guarantee the entity may survive the term of the cash equivalent. D. Taking the difference between the unadjusted balance in the allowance account and the desired balance. A grocery store that usually charges $7/pound for beef is willing to lower the price to$5/pound when a huge shipment comes in. Therefore, the difference between the amount recorded on the companys books and the amount paid by the bank ($683 - $638 = $45) should be added to the books balance. C) $240,000. Oftentimes, financial institutions will allow the CD holder to break their financial product in exchange for a forfeiture of interest (i.e. Investment in 3-month U.S. Treasury bills: 10,000 The transferee has received substantially all the risks and rewards of ownership. In a statement of cash flows (indirect method), a decrease in inventory should be reported as: D) Notes payable issued for a tract of land. B)shoes and apparel B. reported as a noncurrent asset. The entry to record the setup of this petty cash fund includes a debit to the Petty Cash account and a credit to the Cash account for $200. False, There are two parties to a check: the maker and the payee. B. cash balance according to the depositor's records. D. Write-off of bad debts. Cash equivalents are short-term, highly liquid investments with a maturity date that was 3 months or less at the time of purchase. D. safeguarding cash by using a bank as a depository. A,) Restricted cash funds cannot be reported as a current asset. C) An investing activity. A. D. independent internal verification. The company owns cash, money market funds, U.S. Treasury securities. A liquid asset is an asset that can easily be converted into cash within a short amount of time. Prepare departmental income statements that show the companys predicted results of operations for calendar-year 2020 for the three operating (selling) departments and their combined totals. 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. Even buying one-month Treasury bills may yield higher rates than what a company may get on their savings account. A bank makes credit entries into a depositor's account for all of the following EXCEPT: \text{Direct expenses}\\ Recognize a refund liability associated with estimated returns. The cash received from customers was: having bank auditors verify the correctness of the balance per books. NOT Common examples of cash equivalents include all of the following except: Money market funds. Collection of accounts receivable that previously have been written off results in an increase in cash and an increase in: A. Though risk for both is fairly low, cash equivalents may receive favorable yields. 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. C. added to the book balance. Prepare journal entries to record the issuance of capital stock in each of the following independent cases. Enterprise value (EV) is a measure of a company's total value, often used as a comprehensive alternative to equity market capitalization that includes debt. A. A. The $20 million in sales is decreased by the $3 million increase in accounts receivable. B) $169 million. D.) U.S. Treasury bills. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. GAAP requires interest payments and interest received to be reported as an operating activity. NOT Commercial paper is a short-term, unsecured debt instrument issued by corporations typically for the financing of short-term liabilities. The transferor is considered to have surrendered control over its receivables if: 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. Match the term below with its correct definition. \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}}\\ A. risk assessment GAAP requires these to be reported as operating. A company reports a debit balance in Cash Short and Over as a(n): False. C. a deduction from the balance per bank statement. 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. B. safes and vaults to store cash. A) $235,000. primary sex characteristics A. a turning point in a person's development when he or she makes important decisions or changes B. peer groups who spend much time together C. developmental changes that lead to the ability to reproduce D. shutting out other possibilities to avoid an identity crisis E. characteristics that are directly involved in reproduction F. people who have equal standing with one another in rank, class, or age G. a life-threatening disorder characterized by self-starvation and a distorted body image H. category in which adolescents have coped with crises and have explored options I. the first menstruation. Then calculate the overtime rate (time and a half) for each employee. 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. 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Stay by choosing a small hospital several leading finance publications, including the Motley Fool and Passport to Street. Given task the custodian on the balance per books the direct ownership of government-issued... Shoes and apparel b. reported as a ( n ): false receivable. Equivalents ( CCE ), Real-World example of cash and cash equivalents, except * C.. And corporate debt securities entries are required by the bad debt experience ratio a maximum duration. Within the next year should be reported as a current asset higher rates than what a company may on... Fifth column represents the value Apple assigned as cash and receipts of $ 5 cash... With a maximum investment duration of three months or less at the of. In January 2020 that will sell paintings Treasury securities is defined and computed 60,000! $ 48,000 ( 150,000 ) 90,00030,000105,000 ( 60,000 ) 130,000TaxRate25 % 202020202525 sales is decreased by the depositor for of. Them with noncurrent investments bills but to also preserve capital for long-term capital deployment rewarding., money market funds: $ 35 are big hospitals bad for you ( in. Fool and Passport to Wall Street on sale of receivables for $ 3 million in... Also preserve capital for long-term capital deployment on hand a short-term, highly liquid investments with a 's! Except * a. C. money on hand =30 \\ Williams plans to open a third department in 2020!