5short-terminvestments_receivables短期投資和(存儲版)
【正文】 ectible Accounts Writing off Uncollectible Accounts Direct WriteOff Method ? No allowance is established and the expense is recognized when accounts are written off. Mar 31 Uncollectible Account Expense 12 Accounts Receivable – Fiesta 9 Accounts Receivable – StopNShop 3 Wrote off bad accounts by direct writeoff method Direct WriteOff Method ? Assets are overstated on the balance sheet because no allowance account is used. ? Poor matching of uncollectibleaccount expense against revenue. Net ine is overstated. Notes Receivable ? Creditor has a note receivable. ? Debtor has a note payable. ? Interest is revenue to the lender and expense to the borrower. ? Maturity date is on which the debtor must pay the note ? Maturity value is the sum of principal and interest on the note ? Principal is the amount borrowed. ? Term is the length of time when the note was signed by debtor to when the debtor must pay the note A Promissory Note Notes Receivable Laura Holland signs a $1,000 note dated Aug. 31, 20X8 . To record this on the bank’s books: Aug 31 Notes Receivable – L. Holland 1,000 Cash 1,000 Made a loan At , 20X8, the bank accrues 9% interest revenue for 4 as follows: Dec 31 Interest Receivable (1,000 x .09 x 4/12) 30 Interest Revenue 30 Accrued interest revenue Notes Receivable To record collection of the note on Feb. 28, 20X9: Feb 28 Cash 1,045 Interest Revenue (1,000 .09 2/12) 15 Collected note at maturity Interest Receivable 30 Note Receivable – L. Holland 1,000 Speeding Up Cash Flow ? Credit Card or Bankcard Sales ? Selling Receivables ? Both methods result in financing expense. Acid Test Ratio ? Measure of liquidity ? More stringent than the current ratio Acidtest ratio Cash Shortterm investments Net current receivables + + Total current liabilities = Days’ Sales in Receivables ? Compute one day’s sales ( sales / 365 days) ? Compute days’ sales in receivables –(average receivables / one day’s sales) EXERCISETRUE/FALSE ? Marketable securities are investments that a pany is actively attempting to sell. ? False ? Shortterm investments may be divided into heldtomaturity securities, trading securities, and availableforsaleinvestments. ? true EXERCISETRUE/FALSE ? Trading securities are considered to be current assets. ? True ? Trading securities are reported on the balance sheet at their historical cost. ? false EXERCISETRUE/FALSE ? Realized gains and losses are puted by paring cash received at the time of sale to the original cost of the assets. ? False ? Unrealized gains and losses on trading securities are reported as part of current ine. ? true EXERCISETRUE/FALSE ? Notes receivable collected in installments can appear on a balance sheet as both a current asset and a longterm asset. ? True ? Trade receivables are amounts to be collected from customers from the sale of goods and services. ? true EXERCISETRUE/FALSE ? Subsidiary records provide detailed information about control accounts. ? True ? Under the allowance method, the entry to record the estimated bad debts for the period includes a credit to Accounts Receivable. ? false EXERCISETRUE/FALSE ? Allowance for Doubtful Accounts is used to record the bad debts expense for the period. ? False ? The allowance method of accounting for bad debts records collection losses on the basis of estimates rather than waiting to determine which customers will not pay. ? true EXERCISETRUE/FALSE ? Under the allowance method, the entry to write off an account that
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