ACC 113 Lecture Notes - Lecture 5: Tunxis Community College, Cash Flow Statement, Cash Out

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coralimpala133

6 Jan 2021

School

Tunxis Community College

Department

Accounting

Course

ACC 113

Professor

Tinone

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Document Summary

Accrual accounting is primarily used in canada by most entities. Revenue is recognized when earned and expenses are matched to revenue. A business can survive without showing a profit. But needs cash to pay the bills and survive. Cash accounting is less complicated and requires less judgment than accrual accounting (cash in or cash out) Cash receipts are recorded when cash is received cash in and disbursements are recorded when cash is paid cash out . An entity has to spend money to get money. The reality is that there is a time lag between the point where an entity spends cash and receives cash. Cash flow statement"s purpose is to provide users with information about the historical changes in an entity"s cash position. Definition of cash in a cash flow statement: Cash on hand / cash in bank accounts. Most liquid asset, and very crucial to entity. Cash can also be referred to as restricted : ex.

Related Questions

Multiple choice:

1. Any report can be redesigned by viewing the report andclicking the:

a. Options icon

b. Setup icon

c. Design icon

d. Recreate icon

. 2. In Peachtree, the Receipts window is alsoknown as the:

a. Sales journal

b. Cash receipts journal

c. Purchase journal

d. Cash disbursements journal

3. The Statement of Retained Earnings beginswith the beginning balance followed by:

a. Plus net Income (loss) plus adjustments to date

b. Plus net Income (loss) plus investments

c. Plus investments less dividends

d. Plus investments plus net Income (loss. Less dividends

4. The income statement is a summary of:

a. Cash receipts and where they came from.

b. Cash payments and what they were used for

c. The overall change in cash

d. Revenues and expenses over a period of time

5. You enter all checks, cash and credit cardsales in the:

a. Sales Receipts window

b. Receive Money window

c. Payments window

d.General Journal Entry window

6. Cash associated with the purchase of landwould be reported in the statement of cash flows under the:

a. Operating activities section

b. Financing activities section

c. Investing activities section

d. A separate schedule

7. In this method of posting, the transactionsyou enter are saved in a temporary holding area where you canreview them before posting to the general ledger:

a. Batch posting

b. Real-time posting

c. Cash basis posting

d. Accrual basis posting

8. The Sales/Invoicing window is also known asthe:

a. Purchase journal

b. Cash receipts journal

c. Sales journal

d. Cash disbursements journal

9. When you print or display a report, you canfilter the departmentalized report using____________________________ characters:

a. A prefix

b. Wildcard

c. Hexadecimal

d. Text-based

10. The report listing outstanding vendor billsby age of the bill is called the:

a. Aged Payables report
b. Cash Disbursements Journal

c. Cash Requirements report

d. Items Purchased from Vendors report

blushcamel17

1. Which standard issued by the Governmental AccountingStandards Board in 1999 requires two distinct sets of financialstatements for state and local governments?

A) GASB Statement No. 32
B) GASB Statement No. 33
C) GASB Statement No. 34
D) GASB Statement No. 35
E) GASB Statement No. 36

2. Which group of governmental financial statements reports allrevenues and all costs of providing services each year?

A) GAAP-Based Financial Statements
B) Fund-Based Financial Statements
C) Cost-Based Financial Statements
D) Government-Wide Financial Statements
E) General Fund Financial Statements

3. Proprietary fundsare

A) Funds used to account for the activities of a government thatare carried out primarily to provide services to citizens
B) Funds used to account for a government's ongoing organizationsand activities that are similar to those operated by for-profitorganizations
C) Funds used to account for monies held by the government in atrustee capacity
D) Funds used to account for all financial resources except thoserequired to be accounted for in another fund
E) Funds used to account for revenues that have been legallyrestricted as to expenditure

4. Fiduciary fundsare

5. The term "current financial resources" refers to

A) Those assets that can quickly be converted into cash
B) Monetary assets that are available to meet the government'sneeds
C) The government's current assets and current liabilities
D) The current value of all net assets owned by the governmentalunit
E) Financial resources used to provide electricity to localcitizens

6. Which group of financial statements is prepared using the"modified accrual accounting" approach?

A) GAAP-Based Financial Statements
B) Fund-Based Financial Statements
C) Cost-Based Financial Statements
D) Government-Wide Financial Statements
E) General Purpose Financial Statements

7. Under modified accrual accounting, when should anexpenditure to recognize interest on long-term debt berecorded?

A) At the end of each accounting period
B) When payment is due within one fiscal year
C) When payment is due
D) When cash is available to pay the interest
E) When the interest is incurred

8. Revenue from property taxesshould be recorded in the General Fund

A) when received
B) when there is an enforceable legal claim
C) when they are available for recognition
D) in the period for which they are required or permitted to beused
E) in the period in which the tax bills are mailed

9. A city received a grant of$5,000,000 from a private agency. The money was to be used to builda new city library. In which fund should the money be recorded forthe Fund-Based Financial Statements?

A) The General Fund
B) An Expendable Trust Fund
C) A Capital Projects Fund
D) An Agency Fund
E) A Permanent Fund

10. For government-wide financialstatements, what account is credited when a piece of equipment isleased on a capital lease?

A) Equipment - Capital Lease
B) Encumbrances - Long Term
C) Encumbrances - Lease Obligations
D) Capital Lease Obligation
E) The lease is not recorded

11. Jones College, a publicinstitution of higher education, must prepare financialstatements

A) As if the college was an enterprise fund
B) Following the same rules as state and local governments
C) According to GAAP
D) As if the college was a fiduciary fund
E) In the same manner as private colleges anduniversities

peachlion740

The independent auditor is allowed to use a specialist for evaluating a complicated financial transaction provided the specialist is

knowledgeable and independent of the audit client.

approved by the client's board of directors.

all of the above.

acceptable to the PCAOB.

Inappropriately dating transfers of funds between bank accounts to cover shortages of cash is properly referred to as

Cash equivalents

represent current assets that can be converted to cash within a year or an operating cycle, whichever is shorter.

include only cash and highly liquid investments that are virtually free of risk.

should be reported as investments and not be included as cash on the balance sheet.

typically exclude money market funds and treasury bills.

A cut-off bank statement primarily is used to

determine whether reconciling items on the year-end bank reconciliation have cleared the bank.

prepare a year-end bank reconciliation.

test for kiting.

confirm the year-end balance of cash.

An imprest cash account

typically is used for many large miscellaneous disbursements.

typically earns large amounts of interest.

is another name for the general cash account of an organization.

is an account containing a stipulated amount of money to be used for a specific purpose.

An auditor may estimate the appropriate amount of interest expense to be recorded by an audit client by multiplying the average debt by the average interest rate. If the auditor's estimate is considerably larger than the client's recorded interest expense this would be evidence of a potential

failure of the client to accrue interest expense at year end.

the violation of significant loan covenants.

overstatement of recorded interest expense.

understatement of long-term debt.

Internal controls over fixed assets in a smaller entity

usually include authorization by the board of directors.

typically will be very similar to internal controls over other assets within the entity.

must be the same as in larger entities.

are of little importance since fixed assets are not subject to theft or misuse.

A change in depreciation methods employed by an audit client resulting in a material change in depreciation expense

is not necessarily a violation of generally accepted accounting principles.

requires disclosure by the audit client in the footnotes to the financial statements.

must be noted in the audit opinion due to lack of consistency.

is properly described by all of the listed statements.

Auditors typically assess inherent risk for material accounts requiring significant estimates as

Which of the following loans from an audit client, which is a financial institution, made in accordance with the normal lending practices of the financial institution would impair the CPA's independence?

A loan fully secured by certificates of deposit from the same financial institution.

A credit card loan in which the balance carried forward each month does not exceed $9,000.

An automobile loan secured by the automobile.

A home loan equal to less than 50% of the home's value and collateralized by the home.

A CPA has obtained some original records from a client during the course of an audit engagement. At the completion of her audit according to the proper professional standards the client fired the CPA and demanded that the CPA return all of his original records immediately. Under these circumstances which of the following statements is most correct according to the AICPA Code of Professional Conduct?

The CPA may hold the original records she obtained until the client pays for the services she has completed.

The CPA must return only the original records of the client upon demand regardless of the circumstances.

The CPA must return all original records and all copies of original records of the client upon demand regardless of the circumstances.

This is a matter of state law and not a matter covered by the AICPA Code of Professional Conduct.

ACC 113 Lecture Notes - Lecture 5: Tunxis Community College, Cash Flow Statement, Cash Out

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