Quick assets are converted into cash within approximately 90 days. 3.The term cash includes Current assets are converted into cash within one year. (Points: 5) Entries are made to the Petty Cash account when 3. replenishing the petty cash fund. Cash equivalents are also generally included with cash on a business’s financial statements. 14.1-1 Cash equivalents are assets that can be converted to cash within one year.. 14.1-2 The statement of cash flows explains the difference between net income and the change in cash balance.. 14.1-3 Investors and management use the statement of cash flows to evaluate a firm's profitability.. 14.1-4 For purposes of the statement of cash flows, cash includes cash on hand, cash in the bank and cash What entry is required in the company\'s accounts? (Points: 5) Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. (Points: 5) There are three parties to a check. Current assets on the balance sheet include cash, cash equivalents, short-term investments, and other assets that can be quickly converted to cash—within 12 months or less. one year ago, Posted Cash equivalents are investment securities that are convertible into cash and found on a company's balance sheet. Cash equivalents may include gift cards. What entry is required in the company's accounts? Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. Cash equivalents are assets, typically investments that are so liquid and easily converted into cash that they might as well be currency. Cash and cash equivalents information is sometimes used by analysts in comparison to a company's current liabilities to estimate its ability to pay its bills in the short term. Cash equivalents are short-term highly liquid investments which can be readily converted to known amounts of cash and which carry an insignificant amount of risk of change in value. The bonds... G, a scientist holds a patent for the manufacture of a certain electrical appliance. i.e. Calculate depreciation expense using the straight-line method. 6. Cash and cash equivalents information is sometimes used by analysts in comparison to a company's current liabilities to estimate its ability to pay its bills in the short term. The equipment has an estimated residual value of $10,000. The debit recorded in the journal to reimburse the petty cash... b. (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. Cash equivalents are investments that can be readily converted to cash. (Rate this solution on a scale of 1-5 below). (Points: 5) The cash account in the company's ledger is a(n) 4. asset with a debit balance 17. (Points: 5) The amount of the outstanding checks is included on the bank reconciliation as a(n) 4. deduction from the balance per bank statement 19. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 … Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. However, such an analysis may be flawed if there are receivables that can be readily converted into cash within a few days. The followinng accounts come from the ledger of SnowGo Company at October 31, 2019 Equipment $88,000 Roberts, Capital $20,000 Roberts, Drawing $8,000 Salaries Payable $2,000 Accounts Payable $22,000 Notes Payable $19,000 Salaries Expense $42,000... What question would u ask if u was in the board of directors meeting when u see the financial statement ? (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. Assume the machine is anticipated to... On 1 January 20X2, Investor Company purchased $2,000,000 of Operating Corp. 7% bonds, classified as an AC investment. They must be of the highest liquidity in nature and should be easily sold in the market. Any items falling within this definition are classified within the current assets category in the balance sheet. (Points: 5) During a bank reconciliation process, 4. c. are a comparisom of cash and liabillities. (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. For an investment to be considered a “cash equivalent,” it must mature within three months. (Points: 5) A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n) 3. invoice 8. cash equivalents short term, highly liquid investments that can be readily converted to cash with little risk of loss no distinction between cash in the form of currency or bank account balances and amounts held in cash-equivalent investments A.are illegal in some states. Currency. D. should be prepared by an employee who records cash transactions. Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. will be converted to cash within 120 days4. The buyers of such an asset class must be easy to access. (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. These tend to be easily converted into cash if necessary, and may be used as collateral in some cases. Quick assets are converted into cash within approximately 90 days. However, such an analysis may be flawed if there are receivables that can be readily converted into cash within a few days. If there is any question about whether a financial instrument can be classified as a cash equivalent, consult with the company's auditors. Cash, Cash Equivalents, and Short-term Investments Cash includes currency on hand as well as demand deposits with banks or financial institutions. Cash and equivalents The value of assets that can be converted into cash immediately, as reported by a company. (Points: 5) Journal entries based on the bank reconciliation are required in the company's accounts for 1. book errors 18. Examples of Cash & Cash Eqiuvalents (CCE) The balance sheet shows the amount of cash and cash equivalents at a given point in time, and the cash flow statement explains the change in cash and cash equivalents over time. What entry is required in the company's accounts? Cash is defined by IAS 7 as cash on hand and demand deposits. Cash equivalents Cash equivalents are assets that can be readily converted into cash within a period of six months. Importance of Cash and Cash Equivalents … An investment is cash equivalent only if it is primarily acquired with the objective of cash management. 3. Cash equivalents are illegal in some states will be converted to cash within two years will be converted to cash within 120 days will be View the step-by-step solution to: Question Was the final answer of the question wrong? Current assets on the balance sheet include cash, cash equivalents, short-term investments, and other assets that can be quickly converted to cash—within 12 months or less. Current asset types are listed in order … 1.Cash equivalents 4. will be converted to cash within 90 days 2. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. Within this group, such items as Treasury bills and money market funds are common types of this sort of asset. Get it Now, By creating an account, you agree to our terms & conditions, We don't post anything without your permission, Looking for Something Else? 17 hours ago, Posted Cash equivalents are investments that are (IAS 7.6-9): held for meeting short-term cash commitments rather than for investment or other purposes, highly liquid, readily convertible to known amounts of cash and Current assets are a balance sheet item that represents the value of all assets that could reasonably be expected to be converted into cash within one year. Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. Get it solved from our top experts within 48hrs! An example of... a credit memo is 3. a promissory note left for collection 12. b. are desired investments. A financial … However, it’s important to make sure that all assets classified as “current” are included in the calculation, since there are many. 11. Outstanding checks are subtracted and deposits in transit are added to the bank statement balance. 3. a single employee is responsible for collecting and recording of cash 10. A current asset is a company's cash and its other assets that are expected to be converted to cash within one year of the date appearing in the heading of the company's balance sheet. These are extremely low risk, short-term investments that typically mature in no more than 90 days. Question 9Cash equivalents includea.money market accounts and commercial paperb.checksc.coins and currencyd.stocks and short-term bondsQuestion 4A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. These tend to be easily converted into cash if necessary, and may be used as collateralin some cases. Indicate whether the debit or credit total is higher and by how much. Cash equivalents are the most liquid type of quick or current asset because they are expected to convert into cash in less than a few days, but not all current assets are quick assets. The speed within which assets can be converted into cash or used up determines the order in which current assets are reported. An item should satisfy the following criteria to qualify for cash equivalent. Examples of cash are: Coins. C. will be converted to cash within 90 days. Outstanding checks 13. However, companies with a big value of cash and cash equivalents are targets for takeovers (by other companies), since their excess cash helps buyers to finance their acquisition. Get plagiarism-free solution within 48 hours, Submit your documents and get free Plagiarism report, Your solution is just a click away! Cash equivalents are also generally included with cash on a business’s financial statements. 19 hours ago. Cash and cash equivalents is a line item on the balance sheet, stating the amount of all cash or other assets that are readily convertible into cash. This item would be included on the bank reconciliation as a(n) 3. deduction from the balance per the bank statement 15. will be converted to cash within two years2. (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. There are a number of different types of investments that may be properly identified as cash equivalents. We will show you the formula and discuss each of the components below, including an example calculation.The current assets formula is:Current Assets = (Cash & Cash Equivalents) + (Accounts Receivables) + (Inventory) + (Marketable Securities) + (Prepaid Expenses) + (Other Liquid Assets) They are securities that can easily and quickly be converted into cash. Cash equivalents by definition a. are expected to be converted to cash within three months. B. will be converted to cash within two years. Cash equivalents are the most liquid type of quick or current asset because they are expected to convert into cash in less than a few days, but not all current assets are quick assets. Interest of 18% per annum on the P60,000 bank loan granted on December 11, has accrued. The equipment was ready for use on 1 January 20X2. The type of account and normal balance of Petty Cash is a(n)   A. revenue, credit B. asset, debit C. liability, credit D. expense, debit 122. High cash reserves can also indicate that the company is not effective at deploying its CCE resources, whereas for big … Highly liquid investments that are capable of being converted into known amounts of cash without notice and that were within three months of maturity when acquired; from this total must be deducted bank advances that are repayable within three… Cash Equivalents: These are an investment made that can be easily converted to cash and must be of the short term usually with a maturity period of not more than three months or 90 days. 1. E.g., if a business spends $200 to purchase raw material, it will record as the increase of $200 to its raw material and a corresponding decrease to its cash and its equivalents. Log into your existing Transtutors account. Were the solution steps not detailed enough? 3. debit Accounts Receivable; credit Cash 16. A payment of $270 on account was debited to Accounts Payable for $720 and credited to Cash for $720. 3. debit Accounts Payable; credit Cash 3. Solved Expert Answer to Cash equivalents1. cash equivalents a. are illegal in some states b. will be converted into cash in two years c. will be converted into cash within 90 days d. will be converted into cash within 120 days c. are a comparison of cash … Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. D. should be prepared by an employee who records cash transactions. (Points: 5) A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. Cash equivalents are investments that can be readily converted to cash. 2.Cash equivalents . The drawer is 1. is the one who signs the check ordering payment by the bank, Posted Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet.Cash equivalents are short-term commitments "with temporarily idle cash and easily convertible into a known cash amount". Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. (Points: 5) Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called 2. cash controls 20. He allows the Electricals Limited to use the patent on the terms that he will receive a royalty of Rs.10 per electrical appliance manufactured subject to the minimum... 1. cash equivalents by definition. The debit and credit totals would be equal ✓ by $ 1,170 X On March 1,... 85. 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