ch07 - 7-1Intermediate Accounting14th Edition7Cash and...

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Unformatted text preview: 7-1Intermediate Accounting14th Edition7Cash and ReceivablesKieso, Weygandt, and Warfield7-21.Identify items considered cash.2.Indicate how to report cash and related items.3.Define receivables and identify the different types of receivables.4.Explain accounting issues related to recognition of accounts receivable.5.Explain accounting issues related to valuation of accounts receivable.6.Explain accounting issues related to recognition and valuation of notes receivable.7.Explain the fair value option.8.Explain accounting issues related to disposition of accounts and notes receivable.9.Describe how to report and analyze receivables.Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives7-3Most liquid assetStandard medium of exchange Basis for measuring and accounting for all itemsCurrent assetExamples:coin, currency, available funds on deposit at the bank, money orders, certified checks, cashiers checks, personal checks, bank drafts and savings accounts.What is Cash?What is Cash?What is Cash?What is Cash?LO 1 Identify items considered cash.Cash7-4Short-term, highly liquid investments that are bothReporting CashReporting CashReporting CashReporting CashLO 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.Generally, investments with original maturities < 90 daysExamples:Treasury bills, Commercial paper, and Money market funds.7-5Companies segregate restricted cash from regular cash.Examples, restricted for:(1) plant expansion, (2) retirement of long-term debt, and (3) compensating balances.Reporting CashReporting CashReporting CashReporting CashLO 2Restricted CashIllustration 7-17-6Company writes a check for more than the amount in its cash account.Reporting CashReporting CashReporting CashReporting CashLO 2 Indicate how to report cash and related items.Bank OverdraftsGenerally reportedas a current liability.Offsetagainst other cash accounts onlywhen accounts are with the same bank (a contractual right of offset exists).7-7Nontrade Receivables1.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: Insurance companies for casualties sustained; defendants under suit; governmental bodies for tax refunds; common carriers for damaged or lost goods; creditors for returned, damaged, or lost goods; customers for returnable items (crates, containers, etc.).Accounts ReceivableAccounts ReceivableAccounts ReceivableAccounts ReceivableLO 3 Define receivables and identify the different types of receivables....
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ch07 - 7-1Intermediate Accounting14th Edition7Cash and...

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