1. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-1 Current ASSETS: Cash Chapter 6 (1)

2. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-2 Cash Coins and paper money Checks Money orders Travelers’ checks Bank credit card sales Cash is defined as any deposit banks will accept.

3. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-3 Combined with cash on balance sheet Reporting Cash in the Balance Sheet Liquid short- term investments Stable market values Matures within 90 days of acquisition Cash Equivalents

4. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-4 Not available for paying current liabilities Reporting Cash in the Balance Sheet Not a current asset Listed as an investment “Restricted” Cash

5. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-5 The Statement of Cash Flows Summarizes cash transactions for an accounting period. Statement of Cash Flows Includes cash and cash equivalents.

6. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-6 Cash Management Accurately account for cash. Prevent theft and fraud. Assure the availability of adequate amounts of cash. Avoid unnecessarily large amounts of idle cash. Accurately account for cash. Prevent theft and fraud. Assure the availability of adequate amounts of cash. Avoid unnecessarily large amounts of idle cash.

7. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-7 Internal Control Over Cash Segregate authorization, custody and recording of cash. Prepare a cash budget. Prepare a control listing of cash receipts. Require daily deposits. Make all payments by check. Verify every expenditure before payment. Promptly reconcile bank statements. Internal Control Over Cash Segregate authorization, custody and recording of cash. Prepare a cash budget. Prepare a control listing of cash receipts. Require daily deposits. Make all payments by check. Verify every expenditure before payment. Promptly reconcile bank statements.

8. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-8 Bank Statements Shows the beginning bank balance, deposits made, checks paid, other debits and credits during the month, and the ending bank balance. Bank Statement

9. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-9 Reconciling the Bank Statement Explains the difference between cash reported on bank statement and cash balance in depositor’s accounting records. Provides information for reconciling journal entries.

10. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-10 Reconciling the Bank Statement Balance per Bank + Deposits in Transit - Outstanding Checks ± Bank Errors = Adjusted Balance Balance per Depositor + Deposits by Bank (credit memos) - Service Charge - NSF Checks ± Book Errors = Adjusted Balance

11. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-11 Reconciling the Bank Statement All reconciling items on the book side require an adjusting entry to the cash account. Balance per Depositor + Deposits by Bank (credit memos) - Service Charge - NSF Checks ± Book Errors = Adjusted Balance

12. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-12 Reconciling the Bank Statement Example Prepare a July 31 bank reconciliation statement and the resulting journal entries for the Simmons Company. The July 31 bank statement indicated a cash balance of $9,610, while the cash ledger account on that date shows a balance of $7,430. Additional information necessary for the reconciliation is shown on the next page.

13. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-13 Outstanding checks totaled $2,417. A $500 check mailed to the bank for deposit had not reached the bank at the statement date. The bank returned a customer’s NSF check for $225 received as payment of an account receivable. The bank statement showed $30 interest earned on the bank balance for the month of July. Check 781 for supplies cleared the bank for $268 but was erroneously recorded in our books as $240. A $486 deposit by Acme Company was erroneously credited to our account by the bank. Outstanding checks totaled $2,417. A $500 check mailed to the bank for deposit had not reached the bank at the statement date. The bank returned a customer’s NSF check for $225 received as payment of an account receivable. The bank statement showed $30 interest earned on the bank balance for the month of July. Check 781 for supplies cleared the bank for $268 but was erroneously recorded in our books as $240. A $486 deposit by Acme Company was erroneously credited to our account by the bank.

14. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-14 Reconciling the Bank Statement Example

15. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-15 Reconciling the Bank Statement Example

16. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-16 Used for minor expenditures. Petty Cash Funds Has one custodian. Replenished periodically. Petty Cash Funds

17. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-17 PETTY CASH FUNDS Used to pay small amounts An IMPREST SYSTEM involves: 1 establishing the fund 2 making payments from the fund 3 replenishing the fund Accounting entries are required when: 1 the fund is established 2 the fund is replenished 3 the amount of the fund is changed

18. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-18  Two steps to establish a petty cash fund 1 appoint a responsible custodian who will be responsible 2 determine the size of the fund (to cover 3-4 weeks) ESTABLISHING THE FUND 100 The check is written to the custodian.

19. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-19 On March 15 the petty cash custodian requests a check for $87. The fund contains $13 cash and petty cash receipts for postage $44, freight-out $38, and miscellaneous expenses, $5. GENERAL JOURNAL DateAccount Titles and ExplanationDebitCredit Mar. 15Postage Expense Freight-out Miscellaneous Expense Cash (To replenish petty cash fund) 44 38 5 87 REPLENISHING THE FUND  Custodian initiates request for reimbursement.  Custodian prepares a schedule of payments with documentation  Treasurer approves replenishment.

20. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-20 On March 15 the petty cash custodian requests a check for $88. The fund contains $12 cash and petty cash receipts for postage $44, freight-out $38, and miscellaneous expenses, $5. 44 38 5 1 88 REPLENISHING THE FUND Revised entry for cash over and short.

21. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-21 Cash Over and Short Cash Over and Short is debited for shortages and credited for overages. On May 5, XBAR, Inc.’s cash drawer was counted and found to be $10 over.

22. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-22 Cash Over and Short Cash Over and Short is debited for shortages and credited for overages. On May 5, XBAR, Inc.’s cash drawer was counted and found to be $20 short.

23. © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 7-23 การแสดงรายการในงบ การเงิน  สินทรัพย์ สินทรัพย์หมุนเวียน เงินสดและเงินฝากธนาคาร xx