会计英语第4章.pptxVIP

会计英语;4.1 Monetary Capital 4.1.1 Cash Cash includes cash on hand, checks, money orders and cash in bank or bank deposit that can be unconstrained withdrew from banks and other financial institutions. Many companies combine cash and cash equivalents on their balance sheets. Cash equivalents are highly liquid short-term investments that can be easily and quickly converted into cash. .;managers spend a lot of time on managing it. This is for several reasons. First, although cash balance at one point of time may be small, the cash flow during one period can be enormous. Second, cash is the most liquid asset and it is full of temptation to others. If cash is not well protected, it may be easily stolen or misappropriated. Third, adequate cash is essential to a company’s normal operation. Finally, cash itself does not earn income, so it is not suitable for a company to hold too much cash. ;In practice, most of cash are deposited in bank and a company needs to reconcile with bank by preparing bank reconciliations. Usually, there are two sections in the bank reconciliation. The first section begins with cash balance in the bank statement and ends with the adjusted balance. The second section starts with the cash balance in the company’s (depositor’s) journal of cash and ends with the adjusted balance. These two adjusted balances must be equal. ;A proper internal control system over cash is usually comprised of the following procedures: (1) Individuals who receive cash cannot disburse cash. (2) Individuals who handle cash cannot access accounting records. (3) Cash received are immediately recorded and deposited and should not be directly paid out. (4) Disbursements of cash are made by serially numbered checks and with proper authorization by someone other than the person who issues the check. (5) Check the cash on hand every day to ensure that it’s in line with the accounts. (6) Cash in deposit accounts is reconciled monthly. ;To issue checks for all disbursement, no