BUS1 121A Lecture 7: CHAPTER 7
Document Summary
Petty cash: bank account, currency on hand, petty cash, money market funds, treasury bills, commercial paper, cds (certificate of deposit) < 90 days, negative cash (cash balance is negative, current liability. A small amount of cash on hand in a business to meet unexpected needs. Entry if amount in petty cash box is different (small amount) expense. If petty cash fund was replenished & increased amount. Company needs to catch up (needs to record) Interest earned on account (services charges: eft collection from customer (nsf check from customer) Recorded by company bank needs to catch up (needs to record) (outstanding checks: deposits in transit. % of sales rev = bad debt exp. Entry for bad debt exp bad debt exp. No allowance of doubtful accounts & have customer unable to pay. If a factor cannot collect all receivable, seller makes up the difference. Seller has no obligation to the factor after the sale.
