Exam Review 2

Exam Review 2 - Financial Accounting Exam#2 Review Outline...

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Financial Accounting Exam#2 Review Outline Account for short-term investments-5 1. Investments recorded at current market value 2. Trading Securities-means selling them at a higher value within the year (short term) recorded as current assets 3. Unrealized gain or loss- Income Statement 4. Sell then realized gain or loss Use the allowance method for uncollectible receivables-7 1. Receivables get recorded at their net realizable value -what you think you can receive 2. AR allow for UA=NRV 3. Journal entry-adjust uncollectible account debit bad expense and credit allowance for uncollectible account 4. Write off- debit UA is a contra account credit receivable account (reduced) 5. Figure out Net Realizable Value 6. Receivable goes up when you have sale on account goes down when collect customer payment and other collections Use 2 new ratios to evaluate a business-1 Quick Ratio and Days Sales in Receivables 1. Cash + AR + Short Term Investments/Current Liability
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This note was uploaded on 12/14/2011 for the course ECON 10012 taught by Professor My during the Spring '11 term at Kent State.

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Exam Review 2 - Financial Accounting Exam#2 Review Outline...

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