Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
3rd Edition
ISBN: 9780136946649
Author: Elizabeth Gordon, Jana Raedy
Publisher: PEARSON+
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9, Problem 9.1Q
To determine
The meaning of cash equivalents.
Expert Solution & Answer
Answer to Problem 9.1Q
Cash equivalents are the negotiable instruments that can be converted into cash within an operating cycle of the company.
Explanation of Solution
Cash:
Cash is monetary value readily available for spending for the purpose of exchange of goods and services. Cash can be in the form of currency notes, amount deposited in the bank account, bank cheques.
Cash Equivalents:
- Cash equivalent are the negotiable instruments that can be converted into cash within a short period of time
- Examples of cash equivalents are bills receivable, commercial paper, certificate of deposits.
- Generally cash equivalents are investments made for the purpose of earning interest out of the unused cash.
- Use of cash equivalents indicates that a company is financially sound.
Conclusion
Cash equivalents are the negotiable instruments that are substitutes for cash.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
How much are the Cash and cash equivalents?
What is cash equivalent
What is cash payment
Chapter 9 Solutions
Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
Ch. 9 - Prob. 9.1QCh. 9 - Do companies always classify cash as a current...Ch. 9 - Prob. 9.3QCh. 9 - Do accountants typically measure accounts...Ch. 9 - Under the allowance method, will the actual...Ch. 9 - How does an entity record a subsequent recovery of...Ch. 9 - Does the aging of accounts receivable method of...Ch. 9 - What is the difference between pledging accounts...Ch. 9 - How do companies account for receivables that are...Ch. 9 - Is the face value of a note receivable exchanged...
Ch. 9 - What do firms use to record the sales value of a...Ch. 9 - Explain why a company must have highly effective...Ch. 9 - The following are held by YRT Corporation at...Ch. 9 - Fernandez Company had an accounts receivable...Ch. 9 - On its December 31, Year 2, balance sheet, Red...Ch. 9 - Stanberry Company sold 500,000 of net accounts...Ch. 9 - On November 30, Year 1, Derin Corporation agreed...Ch. 9 - Which of the following disclosures about accounts...Ch. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Prob. 9.3BECh. 9 - Prob. 9.4BECh. 9 - Prob. 9.5BECh. 9 - Sales Discounts, Most-Likely-Amount Method. On...Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Recovery....Ch. 9 - Bad Debt Expense, Journal Entry. Paul Anchor...Ch. 9 - Bad Debt Expense. Journal Entry. Paul Anchor,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.14BECh. 9 - Prob. 9.15BECh. 9 - Assigned Receivables. Using the information...Ch. 9 - Factoring Receivables without Recourse. Nicks...Ch. 9 - Prob. 9.18BECh. 9 - Prob. 9.19BECh. 9 - Prob. 9.20BECh. 9 - Prob. 9.21BECh. 9 - Prob. 9.22BECh. 9 - Internal Controls. Identify whether the following...Ch. 9 - Prob. 9.24BECh. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - Prob. 9.1ECh. 9 - Volume Discounts, Sales Discounts. Sodesta Company...Ch. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Write-Offs, Journal Entry....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Percentage of Accounts...Ch. 9 - Prob. 9.9ECh. 9 - Assigning Receivables, Factoring Receivables....Ch. 9 - Prob. 9.11ECh. 9 - Factoring Receivables with and without Recourse....Ch. 9 - Factoring Receivables without Recourse, Factoring...Ch. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Prob. 9.2PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.4PCh. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.7PCh. 9 - Prob. 9.8PCh. 9 - Aging of Accounts Receivable, Write-Offs,...Ch. 9 - Disclosure. Using the transactions listed in P9-9,...Ch. 9 - Prob. 9.11PCh. 9 - Prob. 1JCCh. 9 - Prob. 1FSCCh. 9 - Prob. 1SSCCh. 9 - Surfing the Standards Case 2: Costs Associated...Ch. 9 - Prob. 1BCC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Explain the term Cash Equivalency?arrow_forwardThe statements of financial position for W Limited are as follows: 31 December Non-current assets Land and buildings Cost/valuation Accumulated depreciation Plant and equipment Cost Accumulated depreciation Current assets Inventory Trade receivables Cash and cash equivalents Total Assets Equity and Liabilities Ordinary share capital ($1 shares) Share premium Revaluation reserve Retained earnings Non-current liabilities 12% debenture (2030) Current liabilities Trade payables Bank overdraft 2021 $000 4 1150 201 949 539 326 213 1162 117 135 252 1414 600 120 80 136 936 150 86 242 328 478 1414 2020 $000 650 160 490 454 274 180 670 89 103 37 229 899 400 70 109 579 200 120 120 320 899 Total liabilities Total equity and liabilities The following information is also available. 1 The cost of land and buildings at 31 December 2020 comprised of land $250000 and buildings $400 000. The land, which is not depreciated, had been revalued to $330 000 on 1 July 2021. 2 On 1 March 2021, a final dividend…arrow_forwardWhat is meant by 'cash inflow' and 'cash outflow'?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
