ACCT 103 Lecture Notes - Lecture 18: Money Market Fund, Cash Flow, Adc Telecommunications
4 May 2020
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Document Summary
Cash, the most liquid commodity, is the basic medium of exchange and the basis for calculating and accounting for all other products. Companies typically recognize cash as current assets. Cash consists of coin, money, and available bank deposit funds. Negotiable instruments, such as money orders, certified checks, cashier checks, personal checks and bank drafts, are often known as cash. Banks have the legal right to request prior notice of withdrawal. Since banks seldom need prior notice, savings accounts are considered to be cash. Many negotiable instruments offer an incentive for small investors to earn money. Money market funds that provide control account privileges are usually classified as cash. Such products pose problems with classification: businesses view post-dated checks and ious as receivables. They also treat travel advances as receivables if they are collected from employees or deducted from their salaries. Otherwise, businesses must recognize the travel advance as a prepaid cost.
