Expert Company Proof of Cash October 2017 Quiz

Coin, currency, available funds on deposit at the bank, negotiable instruments

Cash is the most vulnerable asset to fraudulent activities

As temporary investments

<p>Money market savings certificates, certificates of deposit (CDs), similar types of deposits and 'short-term paper'</p> Signup and view all the answers

<p>Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and present insignificant risk of changes in value due to interest rate changes.</p> Signup and view all the answers

<p>Used to meet current operating expenses and liquidate current liabilities</p> Signup and view all the answers

<p>Reporting cash equivalents is important as they are highly liquid investments that can be easily converted to cash and play a vital role in the overall cash management strategy of a company.</p> Signup and view all the answers

<p>Some negotiable instruments</p> Signup and view all the answers

<p>Cash equivalents need to be disclosed separately to provide a clear distinction between highly liquid investments and cash balances in financial statements.</p> Signup and view all the answers

<p>Examples of cash equivalents include Treasury bills, commercial paper, and money market funds.</p> Signup and view all the answers

<p>Cash equivalents are highly liquid investments that are near maturity and present minimal risk of value changes due to interest rate fluctuations.</p> Signup and view all the answers

<p>Cash equivalents are considered low risk because they are highly liquid, near maturity, and have minimal risk of changes in value due to interest rate fluctuations.</p> Signup and view all the answers

<p>Birr 27,457</p> Signup and view all the answers

<p>Companies record the note at face value.</p> Signup and view all the answers

<p>Birr 5,836</p> Signup and view all the answers

<p>Companies record the note at present value and amortize any discount or premium over the life of the note.</p> Signup and view all the answers

<p>Birr 996</p> Signup and view all the answers

<p>Birr 596</p> Signup and view all the answers

<p>The present value of the zero-interest-bearing note is considered as the cash paid to the issuer.</p> Signup and view all the answers

<p>The market rate is used to approximate the effective-interest rate and to determine the present value of the note.</p> Signup and view all the answers

<p>Principal Birr 2,900, Interest 996</p> Signup and view all the answers

<p>Birr 1,335</p> Signup and view all the answers

<p>To approximate the effective-interest (market) rate.</p> Signup and view all the answers

<p>By comparing the future amount and present value of the note.</p> Signup and view all the answers

<p>Companies ignore interest revenue related to accounts receivable.</p> Signup and view all the answers

<p>Companies classify receivables as current if intended to be collected within a year or the operating cycle, whichever is longer. All other receivables are classified as non-current.</p> Signup and view all the answers

<p>Short-term receivables are valued and reported at cash realizable value, which is the net amount expected to be received in cash.</p> Signup and view all the answers

<p>Companies record credit losses as debits to Bad Debt Expense (or Uncollectible Accounts Expense).</p> Signup and view all the answers

<p>The direct write-off method and the allowance method.</p> Signup and view all the answers

<p>Direct Write-Off Method</p> Signup and view all the answers