Explain how each of the following items is reported in a complete set of financial statements, including
Question:
a. Cash equivalents.
b. Cash in a special fund being accumulated as legally required for the purpose of retiring a specific long-term liability.
c. Compensating balances.
d. The amount by which the current market value of securities classified as available for sale exceeds their cost.
e. The Allowance for Doubtful Accounts.
f. The accounts receivable turnover rate.
g. Realized gains and losses on investments sold during the period.
h. Proceeds from converting cash equivalents into cash.
i. Proceeds from converting investments in marketable securities into cash.
Example: a. Cash equivalents normally are not shown separately in financial statements. Rather, they are combined with other types of cash and reported under the caption “Cash and Cash Equivalents.” A note to the statements often shows the breakdown of this asset category.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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