Card Set Information
chapters 7 & 8
*exception to the rule that all disembursments should be made check
* small disbursments-check not appropriate
*set up as imprest basis-fixed amount
*one person in charge
* locked up
*replenish on regular basis
*journalize when replenish
If you forget to replenish petty cash, what will happen?
expenses too low
net income too high
Journalizing petty cash
Add up all like receipts
Travel expense $
postage expense $
supplies expense $
If cash is over money, what do you do?
Put the wrong replenish amount(credit cash) and credit cash over/short by difference
Cash over/short $
If the petty cash is short, what do you do?
Credit cash by the correct amount and debit cash over/short by difference
Cash over/short $
what is on the balance per bank side of the bank reconcilation?
: deposit in transit
: outstanding check
this is what i know but the bank does not know about
What goes on the balance per book side
: fees from bank
add:collection of not receivable
add:eft in(electronic fund transfer)
: check printing
what do you do with errors?
who ever is responsible for the error, the adjustment goes on their side of the bank reconcilation.
What do you do with bad debt expense and uncollected account expense
matching principle-match the expense relating to a sale in the same time period that the sale is.
what is the allowance method?
only acceptable way to estimate the bad debt expense
what is the recording entry of a bed debt expense?
Bad debt expense $
allowance for uncollectable accts $
this is to record an expense in the same time period as a sale
What goes on the balance sheet?
less:allowance for uncollectable accts
this gives you the net realizable
what is the one way to estimate bad debt expense
income statement apporach-% of the credit sales to the estimate the bad debt expense
credit sales 200,000
amt to go bad 4%
what is the other way to estimate the amt of bad debt
balance sheet approach-aging of the accts receivable
calculate the balance that should be in the allowance acct
older the debt, the higher the %
0-30 days, 30-60 days, 60-90 days
you need to look at whatever is already there and make an appropriate entry
What are notes receivable
*always call for
if the not will be collected before the end of year, how do you journalize?
on oct 1 lend an emplyee 10,000 for 90 days at 12%
oct 1 notes receivable 10,000
90 days later collect note
principle x rate x time
10,000 x .12 x 90/360
you will collect 10,300
notes receivable 10,000
interest revenue 300
if the note will be collected after the end of the year, how do you journalize?
nov 1 note receivable 10,000
dec 31 interest receivable 200
interest revenue 200
jan 31 cash 10,300
note receivable 10,000
interest revenue 100
interest receivable 200
the book keeper recorder a check for 340 instead of correct amt of 430, what do you do?
subtract from book
the bank subtracted 1200 for a check that was 1000, what do you do?
add to the bank side
cash/over short becomes what on the balance sheet or income statement
rename it to misc. expense