CASH AND CASH EQUIVALENTS

I. Cash
A. Definition
1. Unrestricted
2. Money
A. Medium of exchange
3. Equivalent
B. Measurement
1. Face value
C. Inclusion
1. On hand – undeposited collection & current funds
A. Petty cash fund
i. Coins & currencies

ii. Change fund

2. In bank – deposits available for withdrawal, non restricted

A. Demand deposits – savings, checking & current accounts
B. Checks- cashier’s, personal, manager's, traveler's, certified
received from customers or other external parties
C. Revolving fund
D. Payroll fund
E. Dividend fund
F. Tax fund
G. Travel fund
H. Interest fund
I. Other types of imprest bank accounts used in current
operations
J. Revolving fund- fund for limited or specific purpose set by mgt

D. Exclusion
1. Postdated checks- checks dated later, unavailable now
A. Initially recorded
Cash
Accounts Receivable
B. Adjusted to post dated
Accounts Receivable
Cash
2. IOUs or employee advances
3. Cash funds not available for use in current operations
A. 1,2&3 – receivables
4. Postage stamps
A. Unused- prepaid supplies
5. Depreciation fund – other assets
 6. Unused credit line
A. Disclosed only in notes, not cash
B. Diff. Between line of credit & actual amount borrowed
7. Unreleased checks drawn and post dated checks
A. Initially recorded
Accounts Payable
Cash
B. Reverted
CASH
Accounts Payable
8. Stale checks
A. Checks not encashed normally within 6 months, expired

E. Cash equivalents
1. Short term & highly liquid investment subject to change; 3 months or less
2. Ex.
a. 3 month treasury bills
b. 90 day money market instrument or commercial
paper
i. Money market instruments in portfolios of short term securities