accounting for cash and receivables

Jun 24th, 2016
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intermidiate accounting notes

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Accounting for cashCash includes currency and coins, balances in checking accounts and items acceptable fordeposits in this accounts. For example cheques, money orders received from customers etcThese forms of cash represent amounts which are readily available to pay off debts or to use inoperations without any legal or contractual restrictions.Cash equivalents include money market funds, treasury bills and commercial papers. To beclassified as cash equivalent these investment must have a maturity date no longer than threemonths from the date of purchaseCash that is available for current operations is classified as current asset while cash that isrestricted in some way and not available for current use is classified as non current assets e.g.investments, other assets etc.Being one of the means of exchange in any business cash needs to be controlled and one of thetools for controlling cash is through bank reconciliation. (Revise on bank reconciliation)Accounting for ReceivablesThis represents a companys claims to the future collection of cash, other assets or services. Theyinclude:Accounts receivables- this are receivables which results from the sale of goods orservices on account also called trade debtors/receivablesNon trade receivables-this includes all those other than trade receivables and include taxrefund claims, interest receivables and loans by companies to either entities includingstockholders and employees.Note receivable- t

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