5 acceleratecashreceiptsfromreceivableswhennecessary

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Unformatted text preview: Interest receivable Interest revenue Chapter 8-30 300 75 SO 5 Describe the entries to record the disposition of notes receivable. Financial Statement Presentation Financial Statement Presentation Illustration 8-12 B a la nc e s h e e t p re s e nta tio n o f re c e iva b le s Chapter 8-31 SO 6 Explain the statement presentation of receivables. Financial Statement Presentation Financial Statement Presentation Managing Receivables Managing accounts receivable involves five steps: 1. Determine to whom to extend credit. 2. Establish a payment period. 3. Monitor collections. 4. Evaluate the liquidity of receivables. 5. Accelerate cash receipts from receivables when necessary. Chapter 8-32 SO 7 Describe the principles of sound accounts receivable management. Chapter 8-33 Financial Statement Presentation Financial Statement Presentation Evaluating Liquidity of Receivables Illustration 8-14 Chapter 8-34 SO 8 Identify ratios to analyze a company’s receivables. Financial Statement Presentation Financial Statement Presentation Evaluating Liquidity of Receivables Accounts Receivable Turnover is used to: Assess the liquidity of the receivables. Measure the number of times, on average, a company collects receivables during the period. Variant of the accounts receivable turnover ratio is average collection period in terms of days. Used to assess effectiveness of credit and collection policies. Collection period should not exceed credit term period. Chapter 8-35 SO 8 Identify ratios to analy...
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