GAAP Policies and Procedures, Second Edition

Chapter 2. Cash, Receivables, and Prepaid Expenses

Definitions of Terms			9
Concepts and Examples			10
	Cash		10
	Prepaid Expenses		11
	Receivables—Presentation		11
	Receivables—Collateral, Assignments, and Factoring		11
	Receivables—Sales Returns		13
	Receivables—Early Payment Discounts		13
	Receivables—Long-Term		14
	Receivables—Bad Debts		14
Decision Trees			15
	Receivables—Ownership Decision		15
Policies			16
	Cash		16
	Prepaid Expenses		16
	Receivables		17
Procedures			17
	Cash—Apply Cash to Accounts Receivable		17
	Cash—Receive and Deposit Cash		18
	Cash—Process Credit Card Payments		18
	Cash—Reconcile Petty Cash		19
	Cash—Reconcile Bank Account		19
	Receivables—Print and Issue Invoices		20
	Receivables—Calculate the Bad Debt Reserve		21
	Receivables—Authorize Bad Debt Write-offs		22
Controls			22
	Cash		22
	Prepaid Expenses		24
	Receivables		25
Forms and Reports			26
	Cash—Mailroom Remittance Receipt		26
	Cash—Bank Reconciliation		26
	Cash—Cash Forecasting Model		27
	Receivables—Bad Debt Authorization Form		29
	Receivables—Collection Actions Taken		29
	Receivables—Aging Report		30
	Receivables—Loan Collateralization Report		31
Footnotes			31
	Cash—Restrictions on Use		31
	Cash—Restrictions Caused by Compensating Balance Agreements		32
	Cash—Excessive Concentration in Uninsured Accounts		32
	Receivables—Bad Debt Recognition		32
	Receivables—Separation of Types		33
	Receivables—Used as Collateral		33
Journal Entries			33
	Cash		33
		Bank reconciliation	33
	Receivables		33
		Accounts receivable, initial entry	33
		Accounts receivable, recording of long-term payment terms	34
		Accounts receivable, sale of	34
		Accounts receivable, ...