True / False: Legally restricted deposits held as compensating balances are considered cash equivalents.
False
How is restricted vs unrestricted vs legally restricted cash disclosed in the financial statements and footnotes?
Restricted cash should be separated from unrestricted cash
If legally restricted, it is not included in cash & cash equivalents
If the restricted cash is tied to a current asset or liability – it’s placed in current assets; else it’s a long-term asset.
What is the objective of performing a bank reconciliation?
To create a “true balance” which is reported on the Balance Sheet
Which of the following items is used to adjust the Bank’s stated balance during a bank reconciliation. (1) deposits in transit, (2) service charges, (3) bank collections, (4) outstanding checks, (5) errors, (6) NSF checks, (7) interest income.
deposits in transit
outstanding checks
errors
Which of the following items is used to adjust the Entity’s stated balance during a bank reconciliation. (1) deposits in transit, (2) service charges, (3) bank collections, (4) outstanding checks, (5) errors, (6) NSF checks, (7) interest income.
