Sarbanes-Oxley, Internal Control, and Cash

1
Sarbanes-Oxley, Internal Control, and Cash
LO 7 Reporting Cash and Cash Equivalents in the
Financial Statements
2
Financial Statement Reporting of Cash
LO 7

• A companys excess cash is normally invested in
  highly liquid investments. These investments are
  called cash equivalents.

3
LO 7
Financial Statement Reporting of Cash

• Companies that have invested excess cash in cash
  equivalents usually report Cash and cash
  equivalents as one amount on the balance sheet.

4
LO 7
Financial Statement Reporting of Cash

• Banks may require depositors to maintain minimum
  cash balances in their bank accounts. Such a
  balance is called a compensating balance.