Kieso_Inter_13e_Ch07

Kieso_Inter_13e_Ch07 - Chapter 7-1 C H A P T E R C H A P T...

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Unformatted text preview: Chapter 7-1 C H A P T E R C H A P T E R 7 7 CASH AND RECEIVABLES CASH AND RECEIVABLES Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield Chapter 7-2 Most liquid asset Standard medium of exchange Basis for measuring and accounting for all items Current asset Examples : coin, currency, available funds on deposit at the bank, money orders, certified checks, cashier’s checks, personal checks, bank drafts and savings accounts. What is Cash? What is Cash? LO 1 Identify items considered cash. LO 1 Identify items considered cash. Cash Chapter 7-3 Short-term, highly liquid investments that are both Reporting Cash Reporting Cash LO 2 Indicate how to report cash and related items. LO 2 Indicate how to report cash and related items. Cash Equivalents (a) readily convertible to cash, and (b) so near their maturity that they present insignificant risk of changes in interest rates. Examples: Treasury bills, Commercial paper, and Money market funds. Chapter 7-4 Companies segregate restricted cash from “regular” cash for reporting purposes. Examples , restricted for: (1) plant expansion, (2) retirement of long-term debt, and (3) compensating balances. Reporting Cash Reporting Cash LO 2 Indicate how to report cash and related items. LO 2 Indicate how to report cash and related items. Restricted Cash Illustration 7-1 Chapter 7-5 When a company writes a check for more than the amount in its cash account. Reporting Cash Reporting Cash LO 2 Indicate how to report cash and related items. LO 2 Indicate how to report cash and related items. Bank Overdrafts Generally reported as a current liability. Offset against cash account only when available cash is present in another account in the same bank on which the overdraft occurred. Chapter 7-6 Summary of Cash-Related Items Summary of Cash-Related Items LO 2 Indicate how to report cash and related items. LO 2 Indicate how to report cash and related items. Illustration 7-2 Chapter 7-7 Receivables Receivables LO 3 Define receivables and identify the different types of receivables. LO 3 Define receivables and identify the different types of receivables. Written promises to pay a sum of money on a specified future date. Claims held against customers and others for money, goods, or services. Oral promises of the purchaser to pay for goods and services sold. Accounts Accounts Receivable Receivable Notes Notes Receivable Receivable Chapter 7-8 Nontrade Receivables 1. Advances to officers and employees. 2. Advances to subsidiaries. 3. Deposits to cover potential damages or losses. 4. Deposits as a guarantee of performance or payment. 5. Dividends and interest receivable. 6. Claims against: a) Insurance companies for casualties sustained....
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This note was uploaded on 03/08/2011 for the course ACCT 3220 taught by Professor Hollie,dana during the Summer '08 term at Colorado.

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Kieso_Inter_13e_Ch07 - Chapter 7-1 C H A P T E R C H A P T...

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