cash in bank

8/19/2019 Cash in Bank

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Cash in bank

. is considered a highly liquid form of current asset, and whenreported on a business' balance sheet, it is combined with cash in

hand for accounting purposes.

. cash on hand

determines what projects a company can undertake, or whatnancial hardships can be absorbed, without going into debt or

arranging other nancing.

. Petty cash

is a small amount of discretionary funds in the form of cash usedfor expenditures where it is not sensible to make any disbursementby cheque, because of the incon enience and costs of writing,signing, and then cas!ccounts recei able is a legally enforceableclaim for payment held by a business against its customer"clientsfor goods supplied and"or ser ices rendered in execution of thecustomer's order. #hese are generally in the form of in oices raised

by a business and deli ered to the customer for payment within anagreed time frame. !ccounts recei able is shown in a balance sheetas an asset. $t is one of a series of accounting transactions dealingwith the billing of a customer for goods and ser ices that thecustomer has ordered. #hese may be distinguished from notesrecei able, which are debts created through formal legalinstruments called promissory notes.%&

. #he allowance for doubtful accounts is a balance sheet accountthat reduces the reported amount of accounts recei able. (! change

to the balance in the allowance for doubtful accounts also a)ectsbad debt expense on the income statement.*


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interest recei able

#he current asset that represents the amount of interest re enue

that was reported as earned, but has not yet been recei ed.

.

.supplies

the act of supplying, furnishing, pro iding, satisfying, etc.+

to begin the supply of household help.

prepaid rent

.

! current asset account that reports the amount of future rentexpense that was paid in ad ance of the rental period. #he amountreported on the balance sheet is the amount that has not yet beenused or expired as of the balance sheet date.

Prepaid insurance

is the portion of an insurance premium that has been paid inad ance and has not expired as of the date of the balance sheet.#his unexpired cost is reported in the current asset account Prepaid$nsurance

#rading securities

are in estments in debt or equity that management plans toacti ely trade for pro t in the current period. $n other words,trading securities are stocks or bonds that management plans topurchase and sell in order to make money in the short term

. ote -ecei able ong #erm/


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otes -ecei able / ong #erm represents long0term notesrecei able, excluding the current portion of the long0termrecei ables. $t also represents all other long term recei ablesreported in the on0current !ssets section. 1hen a companyreports its assets without segregation between current and non0current, all notes recei able are classi ed as otes -ecei able /

ong #erm.

and, sometimes referred to as dry land, is the solid surface of the2arth that is not permanently co ered by water.%& #he astmajority of human acti ity occurs in land areas that support

agriculture, habitat, and arious natural resources.building

! structure with a roof and walls..

.accum. depreciation 0 buildings

#his is a contra long0term asset account which is credited for thedepreciation associated with 3uildings. 4ince it is a balance sheetaccount, the accumulated depreciation account balance does notclose at the end of each year5 therefore, its credit balance willincrease each year. 6owe er, its balance cannot become greaterthan the cost of the buildings.

7urniture and xtures

are long term assets which are showed in assets side of balance

sheet. #hese assets are the part of xed asset and e ery year, wecharged depreciation on these assets. 8epreciation is calculated ontheir useful life and it is deducted from all furniture and xture'sbook alue for showing written down alue in accumulateddepreciation/


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!ccumulated depreciation

is the total amount of a plant asset's cost that has been allocatedto depreciation expense since the asset was put into ser ice.!ccumulated depreciation is associated with constructed assets

such as buildings, machinery, o9ce equipment, furniture, xtures,ehicles, etc. balance sheet.

:9ce equipment

!sset used for the operating functions of a company. :9ceequipment includes desks, chairs, computers, ansalaries expense

salary expense

;nder the accrual method of accounting, the account 4alaries2xpense reports the salaries that employees ha e earned during theperiod indicated in the heading of the income statement, whether ornot the company has yet paid the employees. 4alaries 2xpense willusually be an operating expense (as opposed to a nonoperatingexpense*. 8epending on the function performed by the salariedemployee, 4alaries 2xpense could be classi ed as an administrati eexpense or as a selling expense. $f the employee was part of themanufacturing process, the salary would end up being part of thecost of the products that were manufacturent expense

-ent 2xpense

will report the cost of occupying space during the time inter al

indicated in the heading of the income statement, whether or notthe rent was paid within that period. (-ent that has been paid inad ance is shown on the balance sheet in the current asset accountPrepaid -ent.* 8epending upon the use of the space, -ent 2xpensecould appear on the income statement as part of administrati eexpenses or selling expenses. $f the rented space was used to


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manufacture goods, the rent would be part of the cost of theproducts produced.

utilities expense

;nder the accrual basis of accounting, this account reports the costof the electricity, heat, sewer, and water used during the periodindicated in the heading of the income statement. 3ecause utilitycompanies deli er the ser ice and then later measure the amountsused and then prepare the billing, a company's ;tilities 2xpenseamount should be based on the amount of utilities used during theperiod (as opposed to the amount paid during the accountingperiod*. #he amount of ;tilities 2xpense for the sales function isclassi ed as a selling expense and the amount used foradministration is classi ed as an administrati e expense. ;tilitiesused in the manufacturing process will be part of the cost of theproducts manufactured.

;ncollectible accounts expense

1hen a business or company does not recei e payment for goods orser ices, the transaction must be recorded as an expense for unpaidbalance.

!d ertising 2xpense

$s the income statement account which reports the dollar amountof ads run during the period shown in the income statement.!d ertising 2xpense will be reported under selling expenses on theincome statement.

$nsurance expense

;nder the accrual basis of accounting, insurance expense is the costof insurance that has been incurred, has expired, or has been usedup during the current accounting period for the nonmanufacturingfunctions of a business. (#he insurance costs incurred formanufacturing operations are allocated to the goods produced.*

#axes and licenses


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Paid or incurred in the trade or business acti ities of thecorporation, unless they are re

cash in bank

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