C A S H E Q U I VA L E N T S

 Highly liquid investments

 Short-term
 Acquired three months or less before maturity to qualify (date of purchase)

NOTE:
Equity securities not included
Preference shares can be.

CLASSIFICATIONS MEASUREMENTS RECOGNITION

 Three months or less Cash -FACE VALUE Foreign Currency -

Classified as: Cash and should be unrestricted
Cash Equivalents NOTE: Cash in foreign currency Cash fund for a certain
Line Item: Cash and must be measured at the purpose- set aside for
Cash Equivalents current exchange rate use in current operations
 More than 3 months but
within one year
Classified as: Short-term
financial assets /
temporary investments
Line item: Current
Assets
 More than one year
Classified as:
Noncurrent/ long-term
investments

 Cash fund - either Current or noncurrent, it depends

 Bank overdraft - credit balance, thus not included, "current liability"
 EXCEPTION: if it maintains two or more accounts, it can be offset with the other
 Compensating balance - restricted or unrestricted
 Undelivered or unreleased check -merely drawn and recorded but not given to the
payee before the end of reporting period
 Postdated check delivered - check drawn, recorded and already to the payee
but it bears a date subsequent to the end of reporting period
 Stale check or check long outstanding- check not encashed by the payee within a
relatively long period of time (within six months, but still entity policy mattered)
 Cash shortage - cash count less than balance per book
 Cash overage - cash count more than the balance per book

PETTY CASH FUND

A) imprest fund system
B) fluctuating fund system