chapter 6
CASH, SHORT-TERM INVESTMENTS, AND ACCOUNTS AND NOTES RECEIVABLE
Internal Control and Cash Management
Statement Analysis Considerations
Dividend and Interest Recognition
Recognition of Gains and Losses
Accounts Receivable Valuation Methods
The Allowance Method of Accounting for Bad Debts
Estimating Bad Debts under the Allowance Method
The Direct Write-Off Method of Accounting for Bad Debts
STATEMENT ANALYSIS CONSIDERATIONS
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
- Discuss the main control issues related to cash.
- Prepare a bank reconciliation and make the related adjustments.
- Describe the general criteria for classifying and valuing investments.
- Explain why certain types of investments are reported at their market value.
- Prepare the journal entries for acquiring, holding, and selling short-term investments.
- Explain why it is important to consider the potential uncollectibility of accounts receivable, or “bad debts.”
- Identify two methods for recognizing bad debts, and describe the proper circumstances for using each method.
- Differentiate between two approaches ...
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