Summary CASH+CASH EQUIVALENTS AND TRADE+OTHER PAYABLES
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Course
Accounting (ACCN1010)
Institution
University Of The Witwatersrand (wits)
Book
Concepts-Based Introduction to Financial Accounting
DISTINCTION STUDENT
This is a comprehensive summary including examples of CASH+CASH EQUIVALENTS AND TRADE+OTHER PAYABLES and any other relevent information therein to ensure your academic success.
Cash and cash equivalents, trade and other payables
May 31, 2023
7
2022/2023
Summary
Subjects
cash
cash equivalents
trade and other payables
trade
ias 32
ias 7
financial accounting
accounting
bank recon
bank
suppliers recon
remittance
creditors recon
reconcilliation
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VAT, PURCHASES AND SALES, IAS 1 + IAS2
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Accounting (ACCN1010)
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Content preview
ACCN 1010/1006
CASH+CASH
EQUIVALENTS AND
TRADE+OTHER
PAYABLES
FINANCIAL ACCOUNTING STUDY
NOTES
, CASH AND CASH EQUIVILENTS
What is Cash?
It is defined in IAS 7
• IAS 7 - Cash comprises cash on hand and demand deposits (Deposit of money that can
be withdrawn without prior notice, e.g., in a current & savings accounts.)
• IAS 7 - Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value. (i.e. an investment normally qualifies as a cash equivalent only when it
has a short maturity of, say, three months or less from the date of acquisition,
including bank overdrafts)
Bank OD is also classified as cash but is negative cash
How can businesses prevent fraud and internal controls to implement:
• Segregation of duties (custody of cash must be separated from recordkeeping for cash).
• Cash receipts deposited daily.
• All payments to be made by cheque or EFT
(unless minor).
• Minor payments should be made from petty cash float, which is maintained on an
imprest system(fixed amount at all times) .
• Bank reconciliation prepared on a regular basis to prove accuracy of both reporting
entity & the bank.
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