Accounting Ch 5

Accounting Ch 5 - Chapter 5: Accounting for and...

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Unformatted text preview: Chapter 5: Accounting for and Presentation of Cur rent Assets Cash equivalents are short-term investments readily convertible into cash with minimal risk of price change due to interest rate movements. Commercial paper is a short-term security usually issued by a large, creditworthy corporation. Financial controls and administrative controls are part of the internal control system that is designed to help safeguard all of an entitys assets, including cash. Timing differences include: Deposits in transit, outstanding checks, Bank service charges, and NSF (Not sufficient funds). Net realizable value is the amount expected to be received from customers in settlement of their obligations. Factors causing this are bad debts/uncollectible cash and cash discounts. Some companies willingly accept higher credit risk customers to maximize ROI by having a high margin and requiring a down payment of the item sold....
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Accounting Ch 5 - Chapter 5: Accounting for and...

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