Cash

Question 1

Cash and Cash Equivalents

Answer 1

Assets that are readily available and unrestricted. A business might have cash that is restricted for use, such as for a bond sinking fund, and that would not be included under “cash” on the balance sheet.

Question 2

Examples of Cash

Answer 2

Cash
Coins or Currency
Cash in Bank
Negotiable instruments like checks
Money orders

Question 3

Examples of Cash Equivalents

Answer 3

US treasury bills
Commercial paper
Money Market funds
Certificate of Deposit with maturity date less than 3 months from the date of purchase

Question 4

Reconciling bank balance to book balance

Answer 4

Bank Balance
Add: Deposits in Transit
Less: Outstanding checks
\+/- Bank Errors
\+/- Errors on ledgers
= Book Balance

Question 5

Negative Balance in one bank account

Answer 5

If a company has multiple bank accounts and one bank account has a negative balance, list it as a liability/payable instead of just being netted against the other bank accounts