西方财务会计_chapter5

CHAPTER5CASHANDITSCONTROLIntroductionCashisoneoffinancialassets.Financialassetsincludecash,short-terminvestmentsandreceivables.Financialassetsareshowninthebalancesheetattheircurrentvalues.Currentvalueismeasureddifferentlyforeachtypeoffinancialasset.CurrentvalueThecurrentvalueofcashissimplyitsfaceamount.Thecurrentvalueofshort-terminvestments(marketablesecurities)iscurrentmarketvalue.(representsanexceptiontothecostprinciple)ThecurrentvalueofaccountsreceivableisNetrealizablevalue.Introduction---adequatesupplyofcashto---makevarietypayments---avoidcashshortagesduringbusinessexpansions---otherwisethebusinesshasrisksofinsolventandbankruptcy.---avoidskeepingexcessiveamountsonhandorinbanksbecausecashisanunproductiveassetunlessinvested.Whyshouldabusinesscontrolcash?Toensurethatsufficientcashisavailablewhenneededandthattoomuchcashisnotidle,managersmustplanandcontrolcarefullythecashneedsofthebusiness.Inaddition,becausecashisuniversallydesirable,agoodbusinessmustmaintaincarefulcontroloveritscashtoensurethatitisnotlostthroughfraudorembezzlement.DefinitionofCashCashconsistsofdemanddeposits,currency,coins,moneyorders,andchecksawaitingdeposit.Demanddepositsarebankcheckingaccounts.Savingaccountsarecalledtimedeposits.Timedepositsareusuallyconsideredcashalthoughtheyareinrealitytemporaryinvestments.DefinitionofCashThingsthataresometimesmistakenlyviewedascashbutthatarenotcashincludepostagestamps,postdatedchecks,checksreturnedbythebankforlackofsufficientfunds,andIOUsofemployeesandofficersforsmallamountsborrowedfromthecompany.CashEquivalentsCombinedwithcashaccountintheB/S.Cashequivalentsincludesomeveryliquidshort-terminvestmentsCashequivalentsareverysafe,haveverystablemarketvalue,andmaturewithin90daysofthedateofacquisition.CashcontrollingCashreceiptsCashpaymentsCashbalanceControllingCashReceipts1.Allreceiptsshouldbebankedpromptly.2.Receiptsfromcashsalesshouldbesupportedbysalestickets,cashregistertapes,andsoon.3.Accountabilityshouldbeestablishedeachtimewhencashistransferred.4.Personsreceivingcashshouldnotmakedisbursementsofcash,recordcashtransactions,orreconcilebankaccounts.ControllingCashDisbursements1.Alldisbursements,exceptpettycashpayments,shouldbemadebyprenumberedcheck.2.Vouchersandsupportingdocumentsshouldbesubmittedforreviewwhenchecksaresigned.3.Personswhosignchecksshouldnothaveaccesstocashreceipts,shouldnothavecustodyoffundsorrecordcashentries,andshouldnotreconcilebankaccounts.ControllingcashbalanceBankreconciliationBankaccountsPettycashPettyCashImprestfundForroutinesmalldisbursements.Amountscanvaryfrom$50orlesstomorethan$10,000.Alargeorganizationmayhaveseveralpettycashfundsinavarietyofofficesandproductionfacilities.PettyCash(cont.)Thebalanceofthepettycashaccount,whichispartofthetotalcashbalance,changesonlywhenthefundisestablished,changedinamount,ordiscontinued.PettyCashFund:stepsEstablishment(entries)Makingsmallpayments(preparingpayoutvouchers)(noentries)Attheendoftheperiod,accountantsshouldmakeentriesforpaymentsandreplenishment.(includinganyCashshortorover)PettyCashFund:Example1.Assumethata$3,000pettycashfundisestablished.PettyCash3,000Cash3,000PettyCashFund:Example(cont.)2.Thecustodianreviewsauthorizationonvouchersforcashrequestsanddispensestherequiredcash.Thevouchersarekeptwiththefund.Thesumofcashandvouchersshouldequal$3,000.Journalentriesarenotmadefordisbursements.PettyCashFund:Example(cont.)3.Attheendofthefirstmonth,assumethat$560remainsinthefund,indicatingthat$2,440wasdisbursedduringthemonth($3,000-$560)andthatthecustodianshouldhave$2,440insupportingpayoutvouchers.(2440payout+560remains=3000)PettyCashFund:Example(cont.)Theentrymadebytheaccountantisasfollow:PostageExpense900OfficeSuppliesExpense700TransportationExpense800Utilityexpense40Cash2,440PettyCashFund:ExampleIfsomeerrorsoccur:Presumably,avoucherwaslost,oravoucherunderstatestheamountdisbursed.Thefollowingindividualvouchersaccompanythefund:postage,$900;officesupplies,$700;andtaxifares,$800($2,400intotal).Thereisa$40cashshortage($2,440-$2,400).PettyCashFund:ExampleTheshortageisreflectedinareplenishmententry:PostageExpense900OfficeSuppliesExpense700TransportationExpense800CashShortandOver40Cash2,440PettyCashFund:Example4.Whenapettycashfundisincreased,decreased,orclosed,anentryismadeaffectingboththepettycashandcashaccounts.Forexample,ifthefundisincreasedto$5,000becauseofincreasedofficecashneeds,theentryisasfollows:PettyCash2,000Cash2,000TheBankReconciliationAbanksendsitsdepositorsmonthlystatementsdescribingtheactivityofthedepositor’saccount.Thestatementincludesthecashbalanceintheaccountatthebeginningofthemonth,alistofdepositsmadeduringthemonth,alistofcheckspaidbythebankforthedepositor,andtheendingbalanceintheaccount.Inaddition,thebankalsolistsanyservicechargesthatithasdeductedfromtheaccountandothertransactionsthatmayhavetakenplace,suchasthecollectionofanotebythebankonbehalfofthedepositor.TheBankReconciliationWhenthedepositorreceivesthemonthlystatement,areconciliationshouldbepreparedtoexplainanydifferences(includingevi