acctg for nonfinance (cash)

7/24/2019 Acctg for Nonfinance (Cash)

1/16

Cash and cashequivalents

Cha

pt

er 6


2/16

Cash, Cash Equivalents, and Liquidity

Cash Currency, coins and amounts on deposit

in bank account, checking accounts, and

some savings accounts.


3/16


Cash Equivalents are short-term, highly liquid investmentsthat are:

Readily convertible to a known cash amount.

Close to maturity date and not sensitive to interest rate changes.


4/16


iquidity !ow easily an asset can be converted into another asset or be

used in paying "or services or obligations.

Inventory Cash


5/16

Petty Cash

#mall payments required in mostcompanies "or items such as postage,courier "ees, repairs and supplies.


6/16

Operating a Petty Cash Fund

Petty Cashier

$reasurer and%ccountant &etty Cashier

GENERAL O!RNAL Page "

#ate #escription PR #e$it Credit

%ay & Petty Cash "''

Cash "''


7/16

Petty Cashier

Petty Cashier



8/16

Petty Cashier

(")

Stamps Courier


Petty Cashier

(")

Stamps Courier

Receipts


9/16

Petty Cashier

Receipts

Treasurer andAccountant

GENERAL O!RNAL Page "

#ate #escription PR #e$it Credit

%ay &* Postage E+pense "*

Courier E+pense ,'

Cash &-*

'()*

To reimbursepetty cash fund

We use a CashOver and Short

account if needed.

We use a CashOver and Short

account if needed.



10/16

Petty Cash E+a.ple

Ewan Co. maintains a petty cash "und o" '+.$he "ollowing summary in"ormation was taken"rom petty cash vouchers "or uly:

$ravel Epenses '/0.1

Customer 2usiness unches 01.+)

Epress 3ail &ostage **.

3iscellaneous 4""ice #upplies 1).+5

et6s look at replenishing the "und i" the balanceon uly 1( was '(1/.5.


11/16

Petty Cash E+a.ple

7hat amount o" cash will be required to replenish thepetty cash "und8

a. ')9.)

b. ')9).)

c. '(10.5

d. '(1/.5#esired /alance "''0''1

Actual /alance &(20,'

A.ount Needed -3-0-'1


12/16

Petty Cash E+a.ple

$he ournal entry to replenish the petty cash "und is:

GENERAL O!RNAL Page ,#ate #escription PR #e$it Credit

ul (& 4ravel E+pense 250('

Entertain.ent E+pense 5(0"-

Postage E+pense **0''

O66ice 7upplies E+pense (-0",

Cash Over and 7hort -0''

Cash -3-0-'


13/16

Purchase #iscounts

Cha

pt

er 6


14/16

Purchase #iscounts

Previously 8e have recorded purchases o6%erchandise Inventory at the gross a.ount0#iscounts 8ere not recogni9ed until pay.ent

8as .ade0

GENERAL O!RNAL Page #ate #escription PR #e$it Credit

%ay &' %erchandise Inventory &,'''

Accounts Paya$le &,'''

Purchase $1,000, subject to 2/10, n/30

%ay &5 Accounts Paya$le &,'''

%erchandise Inventory -'

Cash 5'


15/16

Control o6 Purchase #iscounts

As an alternative, 8e .ay record the purchasenet o6 any discount0 :e assu.e that all

discounts 8ill $e ta;en0

GENERAL O!RNAL Page #ate #escription PR #e$it Credit

%ay &' %erchandise Inventory 5'

Accounts Paya$le 5'


%ay &5 Accounts Paya$le 5'

Cash 5'


16/16

Control o6 Purchase #iscounts

:hen 8e use the net .ethod, attention is dra8n 8henavaila$le discounts are not ta;en0

GENERAL O!RNAL Page ,#ate #escription PR #e$it Credit

%ay &' %erchandise Inventory 5,'

Accounts Paya$le 5,'


%ay -& #iscounts Lost -'

Accounts Paya$le -'Discounts Lost is an

expense account and is included

on the income statement.

acctg for nonfinance (cash)

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