Investment Classification and Valuation: Cash Equivalents, Debt and Equity Holdings

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Finance - Personal Finance

jake12testoswi Created by 10 mon ago

Cards in this deck(35)

Cash equivalents are financial instruments with a maturity of less than _____ months.

Long term investments are non-current assets meant to be held for over _____ year.

Debt investments involve bonds and notes where you lend money but don't own any part of the _____.

Equity investments involve buying stocks to earn a piece of the _____.

A valuation allowance is a contra-account that adjusts the value of investment securities on the _____ sheet.

Unrealized gains/losses are presented as 'other expenses' on the _____ statement.

The formula for semi-annual interest is Principal x Rate x _____.

Debt securities held to maturity are reported at _____.

Debt securities actively traded for profit are reported at _____ value.

Debt securities available for sale are reported at _____ value.

Equity investments with under 20% ownership use the _____ value method.

Equity investments with 20-50% ownership use the _____ method.

Equity investments with more than 50% ownership use the _____ method.

Types of cash include currency, coins, checks, money orders, and checking/saving account _____.

A compensating balance is the minimum amount a company must keep in the bank as security for a _____.

Bank reconciliation reasons include deposits in transit, outstanding checks, and _____ checks.

Bank reconciliation rules state errors go on the side of the party that made the _____.

Petty cash is used for small payments made in _____.

The Fraud Triangle consists of opportunity, pressure, and _____.

A key element of fraud is _____.

The Direct Write-off method records the expense when we write off the receivable, only used for _____ basis.

The Direct Write-off method is not allowed under GAAP because it violates the _____ principle.

The Allowance Method records expenses in the period of sale and is allowed under _____.

Methods for estimating bad debt include the income statement approach and the _____ sheet approach.

The income statement approach ignores beginning balance and debits bad debt expense, crediting allowance for bad _____.

The balance sheet approach determines how much total allowance is needed and considers the beginning _____.

A/R aging splits the entire balance into buckets based on how old the _____ are.

Credit card sales are considered cash sales by the retailer, debiting the credit card expense with cash and crediting _____.

Factoring receivables involves selling receivables for a _____.

Recourse allows the factor to collect from the original company if they can't collect the _____.

Accounts Receivable Turnover measures how many times per year a company collects its receivables using the formula: Net credit sales/Average Net _____.

Days Sales Outstanding measures how quickly a company can convert A/R to cash using the formula: (A/R / Net sales) x _____.

The Average Collection Period measures how many days it takes to collect receivables using the formula: 365/A/R _____.

A Promissory Note is a legal promise to pay, pays interest, and has stronger legal standing than _____.

The interest payment formula is Principal x Rate x _____.

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Investment Classification and Valuation: Cash Equivalents, Debt and Equity Holdings

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