Professional Documents
Culture Documents
Prepared by
Jep Robertson and Renae Clark
New Mexico State University
Chapter 7: Cash and Receivables
• Definition of “cash”
• Management and control of cash
• Reporting of cash in the balance sheet
Items Comprising “Cash”
Compensating balances:
• are amounts maintained by a corporation
with a bank in support of existing borrowing
arrangements.
• are identified as current assets separate
from cash, if they relate to short-term
loans.
• are identified as non-current assets
separate from cash, if they relate to long-
term loans.
Bank Overdrafts
Notes Receivable
Conditions
1. Are transferred assets isolated
from transferor? and Yes Sale
2. Does transferee have right to
pledge or sell assets? and
3. Has transferor divested itself
of control through repurchase No Borrowing
agreement?
Accounting for Transfers of
Receivables
Transfers
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