The following financial assets appeared in a recent balance sheet of Apple, Inc. (dollar amounts are stated in millions).
Cash and cash equivalents...........................................................$21,120
Marketable securities (short-term investments) ....................................20,481
Accounts receivable (net of allowance for doubtful accounts of $82) .........16,849
a. Define financial assets.
b. A different approach is used in determining the balance sheet value for each category of Apple Inc.'s financial assets, although each approach serves a common goal. Explain.
c. Why do companies like Apple Inc. hold so much of their financial assets in the form of marketable securities and receivables?
d. What types of investments might Apple Inc. own that are considered cash equivalents?
e. Explain what is meant by the balance sheet presentation of Apple Inc.'s Accounts Receivable as shown in the table.