CLASS QUESTIONS 7A

CLASS QUESTIONS 7A - CLASS QUESTIONS(7A(1 As part of a...

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CLASS QUESTIONS (7A) (1) As part of a borrowing arrangement with its bank, Adams Company is required to maintain a certain minimum amount of cash on deposit with the bank. What term is used to describe the minimum cash balance? Under what circumstances should Adams report this cash on its balance sheet as a non-current asset rather than a current asset? (2) The current assets reported by many companies begin with cash and cash equivalents . In this regard, what is meant by are cash equivalents? What are some examples of cash equivalents? Cash equivalents are short-term highly liquid investments that are both A: readily convertible to known amounts of cash, and b: so near their maturity that they present insignificant risk of changes in interest prates. An example would be stock (3) What is the meaning of net realizable value with respect to reporting short-term receivables on the balance sheet? In addition to potential bad debts, what do you think are some other reasons why the net realizable value of accounts receivable might be less
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This note was uploaded on 09/02/2011 for the course MGT 3305 taught by Professor Reed during the Spring '08 term at Baylor.

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CLASS QUESTIONS 7A - CLASS QUESTIONS(7A(1 As part of a...

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