Short-Term Investments in addition to Receivables Short-Term Investments Short-Term Investment Categories Trading Securities

Short-Term Investments in addition to Receivables Short-Term Investments Short-Term Investment Categories Trading Securities www.phwiki.com

Short-Term Investments in addition to Receivables Short-Term Investments Short-Term Investment Categories Trading Securities

Stein, David, Host has reference to this Academic Journal, PHwiki organized this Journal Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Short-Term Investments in addition to Receivables Chapter 5 Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Account as long as short-term investments Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

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Short-Term Investments Also called marketable securities Easily convertible into cash Next most liquid asset after cash Expected to be held one year or less Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Short-Term Investment Categories Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Trading Securities Held as long as a short time in addition to then sold If market price of investment increases, a gain results If market price of investment decreases, a loss results Can be debt or equity securities of another company Earn interest or dividend revenue Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Accounting as long as Trading Securities Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Unrealized Gains in addition to Losses Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Adjusting Trading Securities to Market If market value increases over period If market value decreases over period Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Balance Sheet & Income Statement Reporting Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Realized Gains in addition to Losses Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Exercise 5-21A Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Exercise 5-21A Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Apply GAAP as long as proper revenue recognition Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Revenue Recognition Revenue recognized when earned Seller has transferred good or service to customer Price is fixed or determinable Collection reasonably assured Amount is cash value of goods or services transferred Impacted by shipping terms in addition to payment incentive Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Shipping Terms FOB Shipping Point FOB Destination Ownership changes h in addition to s Revenue recognized When goods leave seller’s shipping dock Ownership changes h in addition to s Revenue recognized At point of delivery to customer Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Sales Discounts Offered to customers to speed up cash flow Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. 2/10, n/30 Sales Returns & Allowances Right to return unsatisfactory or damage merch in addition to ise Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Net Revenue Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Account as long as in addition to control as long as accounts receivable Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Receivables Third most liquid asset Monetary claims against others Acquired mainly by: selling goods in addition to services (accounts receivable) lending money (notes receivable) Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Accounts Receivable Amounts collectible from customers Balance in general ledger Control account: summarizes total amount due from all customers Subsidiary ledger Separate account as long as each customer Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Accounts receivable $5,000 Customer A Customer B $2,000 $1,800 Customer C $1,200 General Ledger Accounts Receivable Subsidiary Ledger Total $5,000 Notes Receivable More as long as mal than accounts receivable Written promise to pay a sum at the maturity date Plus interest Also called promissory notes Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

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Internal Control: Collections on Account Separate cash-h in addition to ling in addition to cash accounting duties Bookkeeper should not h in addition to le cash Should record amounts from remittance advices Separate employee should open incoming mail in addition to make deposit Another option: Lockbox system Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Risks of Selling on Credit Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Evaluate collectibility using the allowance method as long as uncollectible accounts Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Uncollectible Receivables Benefit of selling on credit Cost of selling on credit Customers that do not have cash available can buy on credit Sales in addition to profits increase Company cannot collect from some customers This cost is called “Uncollectible-account expense”, “Doubtful-account expense”, or “Bad debt expense” Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. The Allowance Method Records collection losses based on company’s collection experience Estimates Uncollectible-Account Expense Also sets up Allowance as long as Uncollectible Accounts Contra-account to Accounts Receivable Shows amount of receivables expected not to be collected. Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Net Realizable Value Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Stein, David Host

Stein, David is from United States and they belong to Sporting News Radio Network and they are from  Scottsdale, United States got related to this Particular Journal. and Stein, David deal with the subjects like Sports

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