Cash and Cash Equivalents

Cash is a payment tool and includes part of the liquid assets, which can be used immediately to meet financial obligations of the company. Cash can be in cash or in bank deposits that can be used and accepted as means of payment at nominal value, such as paper and metal money, check and bank draft, bank deposits in current accounts and others.

Cash includes cash and bank and savings directly in banks can be cashed at any time without reducing the value of the deposits. Cash may consist of petty cash or other cash funds as cash receipts and checks (which is not backwards) to paid to the bank.

Equivalents are investments that are highly liquid, short-term and quickly made ​​a certain amount of cash without facing the risk of changes in value significantly.

Small cash payments provided for purposes of the small numbers and are not practical when done by check. All petty cash expenses recorded in the petty cash book and posted to the general ledger only once when the petty cash replenishment. Funds specified in the petty cash should be set melelui management decisions and must not exceed these specifications. Petty cash expenditures can only be made after the order has been signed by the cash disbursements authorized officer.

Treasury functions in a company is very important, because almost every activity undertaken by the company are always associated with kas. Without cash will not run smoothly. Good corporate cash needed to finance day-to-day enterprise or for the purchase of fixed assets, properties continue or not continue. Continue nature, for the purchase of raw materials, payment of salaries and wages, purchasing consumable office suplies etc.. While the nature Not Continue, for payment of taxes, dividends, installment, loans etc..