Click to edit title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Accounting English,Unit Six,Learning Objectives,Unit Six,to understand the definition of cash;,to describe the nature of cash;,to understand internal cash control.,We are all concerned about our cash. Likewise, businesses are concerned about safeguarding and controlling cash. Inadequate controls can and often do lead to theft, misuse of funds, or otherwise embarrassing situations. To detect errors, whom should control procedures be used by?,Warming-up,Unit Six,Vocabulary,Unit Six,deposit,check,IOU,exclude,definition,earmark,prohibit,receipt,sustain,reimburse,external,electronic funds transfer,reconcile,disbursement,outstanding check,储蓄，贮存延期的,支票,借据,除去，不把.包括在内,定义,指定(资金的)用途，特殊记号，特征,禁止，阻止；防止,收据,确认，认可,归还，赔补偿；报销,外部的,电子资金转账；电子资金汇兑,调解,支付，支出,未兑现支票,Notes,Unit Six,NFS: not sufficient funds 存款缺乏,petty cash fund 备用金制度,为了便于小额现金支出，而置存一个固定数字的现金，以定额备用金的形式加以管理。,Electronic funds transfer (EFT) 电汇,bank reconciliation 银行存款调节表,由于未达帐项或其他过失等原因，企业的现金日记账与银行对账单通常不能直接核对一致，而必须通过编制银行存款调节表，将未达帐项和过失进行调整和改正后，二者才能核对相符。,Exercises,Unit Six,I. Word Study.,Complete the following sentences.,1.Writing a _ decreases cash balance of the checking account.,2._ _ fund is established for minor recurring cash expenditures.,3.The _ _ is prepared to bring the bank balance and _ balance of cash into agreement.,4.A _ _ is a form issued by a bank to describe activities in a depositors account.,5.A _ memo causes the cash account to be credited and a debit memo causes the cash account to be _.,6.A _ _ _ _ account is used to determine the amount of cash short and over for an petty cash fund.,Exercises,Unit Six,II.,Choose the best answer.,1,. CanTex had $54 in missing petty cash receipts. What is the correct treatment?,A. Debit Cash Over and Short for $54.,B. Credit Cash Over and Short for $54.,C. Debit Petty Cash for $54.,D. Credit Petty Cash for $54.,2. Zimbooru Company had $12 in extra cash at the end of the day. What is the correct treatment?,A. Credit Cash for $12.,B. Debit Cash for $12.,C. Credit Cash Over and Short for $12.,D. Debit Cash Over and Short for $12.,Exercises,Unit Six,3. The custodian of a $500 petty cash fund has $62.50 in coins and currency plus $432.50 in receipts at the end of the month. What will the entry to replenish the petty cash fund include?,A. A debit to Miscellaneous Expenses for $427.50.,B. A credit to Cash Over and Short for $5.00.,C. A credit to Cash for $432.50.,D. A credit to Cash for $437.50.,Exercises,Unit Six,4. EpsCo plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. What will the entry to eliminate the fund include?,A. Debit to Cash Short and Over for $10.,B. Debit to Cash for $165.,C. Debit to Miscellaneous Expenses for $35.,D. Credit to Petty Cash for $165.,Exercises,Unit Six,5. For what reason might a bank issue a debit memorandum?,A. To notify a depositor of all increases to the depositors account.,B. To notify a depositor of a deduction to a depositors account.,C. To notify a depositor of an electronic funds transfer into their account.,D. To notify a depositor of an error in the depositors accounting records.,Exercises,Unit Six,III. Cases,1. Luxton Supplies showed the following selected adjusted balances at its December 31, 2001 year-end:,Accounts Receivable Allowance for Doubtful Accounts,During the year 2002, the following selected transactions occurred:,(1)Sales totaled $1,480,000, of which 25% were cash sales.,(2)Sales returns and allowances were $57,000, half regarding credit sales.,(3)An account for $12,000 was recovered.,(4)Several accounts were written off $19,500.,(5)Collections from credit customers totaled $940,000 (excluding the recovery in (3) above).,Dec.31/01,Balance 249,000,Dec. 31/01,8,340 Balance,Exercises,Unit Six,Required:,(1)Prepare the December 31, 2002 adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 1% of net credit sales.,(2)Show how accounts receivable will appear on the December 31, 2002 balance sheet.,(3)What will bad debts expense be on the income statement for the year ended December 31, 2002?,Exercises,Unit Six,2.The Tor-Mont Company has been in business for three years and has applied for a significant bank loan. Prior to considering the applications, the bank asks you to conduct an audit for the last three years. Concerning accounts receivable, you find that the company has been charging off receivables as they finally proved uncollectible, and treating them as expenses at the time of write-off.,Your investigation indicates that receivable losses have approximated (and can be expected to approximate) 2% of net sales. Until this first audit, the companys sales and direct receivable write-off experience was:,Year of Sales,Amount of Sales,Accounts written off in:,2000,2001,2002,2000,$450,000,$1,500,$6,000,$1,800,2001,600,000,3,000,7,200,2002,750,000,-,Exercises,Unit Six,Required:,(1)Indicate the amount by which net income was understood or overstated each year because the company used the direct write-off method rather than the generally acceptable allowance method.,(2)Prepare all entries for each of the three years that would have been made if Tor-Mont had used the allowance method from the start of the business.,