Question

Use the following to answer questions 1 - 4 Determine whether the firm reports each of the following items as part of cash, cash equivalents, or neither in the balance sheet Item Cash, Cash equivalent, or neither 1 2. 3 Inventory that will be sold in 30 days 30 day US Treasury bill Accounts receivable to be collected in 30 days Investments with maturities of six months Use the following to answer questions 5-8 Bank Reconciliation: Identify whether the item should be added or subtracted from the bank balance or the company balance. Use the number (1-4) for your response. For instance, if the amount should be added to bank statement balance you would input 1. 1. Added to bank statement balance 2. Subtracted from bank statement balance 3. Added to company cash balance 4. Subtracted from company cash balance # 5 6 Item Bank error cleared the same check twice Company error, wrote check for $890 but recorded it as $980 Checks outstanding Interest earned on bank account 7 8

Answer 1

1.	Neither
2.	Cash Equivalent
3.	Neither
4.	Neither
5.	Added to bank statement
6.	Added to cash balance
7.	Subtracted from bank statement
8.	Added to cash balance