ch07 - 7-11.Identify items considered cash.2.Indicate how...

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Unformatted text preview: 7-11.Identify items considered cash.2.Indicate how to report cash and related items.3.Define receivables and identify the different types of receivables.4.Accounting issues related to recognition of accounts receivable.5.Accounting issues related to valuation of accounts receivable.6.Accounting issues related to recognition and valuation of notes receivable.7.The fair value option.8.Accounting issues related to disposition of accounts and notes receivable.9.Describe how to report and analyze receivables.Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives7-2Short-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.Examples:Treasury bills, commercial paper, and money market funds.7-3Companies segregate restricted cash from regular cash.Examples: cash may be restricted for:(1) plant expansion, (2) retirement of long-term debt, and (3) compensating balances.Reporting CashReporting CashReporting CashReporting CashLO 2Restricted CashIllustration 7-17-4Company 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.7-5Summary of Cash-Related ItemsSummary of Cash-Related ItemsSummary of Cash-Related ItemsSummary of Cash-Related ItemsLO 2Illustration 7-27-6Accounts ReceivableAccounts ReceivableAccounts ReceivableAccounts ReceivableLO 3 Define receivables and identify the different types of receivables.Written promises to pay a sum of money on a specified future date.Receivables- 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 ReceivableReceivableAccounts Accounts ReceivableReceivableNotes Notes ReceivableReceivableNotes Notes ReceivableReceivable7-7Nontrade 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.)....
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ch07 - 7-11.Identify items considered cash.2.Indicate how...

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