Quiz 9: Cash
Balance sheet: The balance sheet is the statement showing assets and claims to assets for a particular period of time. The claims to assets can be splits to two parts that is clams of owners and claims of creditors. Claims of creditors are called as liabilities and the claims of owners are called as stockholders equity. Balance sheet is a statement of financial position. It is one of the main reports in financial statements. It shows the financial position of the company. Balance sheet will be prepared for a specific period. It summarizes a company's assets, liabilities and shareholders' equity. It is prepared by using accounting equation that is 'Assets = Liabilities + Stockholders' Equity'. Calculation of cash and cash equivalents to the total current assets : Therefore, the percentage of cash and cash equivalents to the total current assets is 10.22%.
Cash management means that the cash must be handled in the most efficient matter and by following certain procedures in order to ensure that there is no embezzlement of cash and there is no mis-utilization of cash and authority. The procedure must be changed due to the fact that there is no guarantee that the money that has been received has been actually recorded. The procedure must be changed due to the reason that the payments made can be sometimes un-authorized and that there is a gap of control between the two activities which must be covered in order to avoid any false utilization of cash. The procedure must be changed due to the reason that keeping cash in the premises would increase the chances of theft and the management would never know the exact amount of cash held by them. The procedure must be changed due to the fact that keeping the cash in the office premises would increase the chances of theft. The procedure must be changed due to the reason of weakness in the internal control over the cash receipts.
Bank reconciliation statement: The bank reconciliation statement is prepared in order to ascertain and reconcile between the differences of the bank account, cash account and the checkbook of the depositor. 1. Compute the cash sales and cash shortages: The following is the statement showing the calculation of total amount of cash sales and cash shortages: The following entries would be passed: Page 56 The following procedures are recommended: a. The cash must be counted along with the clerk s and when his shift expires. b. J must print the cash register tape and compare it the amount in the cash register. c. The same procedure must be adopted by J with his other clerks as well. d. The amounts of sales must be compared with the sales per day, amounts that is deposited in the bank and any discrepancies must be adhered into.