Chapter 7 Short-Term Liquid Assets

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Table of Contents

Chapter 7 Short-Term Liquid Assets

LEARNING OBJECTIVES

LEARNING OBJECTIVES (continued)

Management Issues Related to Short-Term Liquid Assets

Managing Cash Needs During Seasonal Cycles

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Setting Credit Policies

The Credit Department

Analyzing Credit Policies

Receivable Turnover

Receivable Turnover

Average Daysí Sales Uncollected

Average Daysí Sales Uncollected

Average Daysí Sales Uncollected

Average Daysí Sales Uncollected

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Financing Receivables

Factoring Without Recourse

Factoring With Recourse

Discounting (Selling) Notes Receivable

Discussion

A.

Cash and Cash Equivalents

Cash

Cash Equivalents

Cash on Hand

Electronic Funds Transfer

Discussion

A.

Short-Term Investments

Short-Term Investments or Marketable Securities

Long-Term Investments

Held-to-Maturity Securities

Example of Held-to-Maturity Securities

Trading Securities

Example of Trading Securities

Example of Trading Securities

Example of Trading Securities

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Available-for-Sale Securities

Discussion

Accounts Receivable

Accounts Receivable

Accounts Receivable (continued)

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Uncollectible Accounts

The Direct Charge-off Method

Uncollectible Accounts and the Allowance Method

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Example of the Allowance Method

Estimating Uncollectible Accounts Expense

Percentage of Net Sales Method

Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

Example of Accounts Receivable Aging Method

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Writing Off an Uncollectible Account

Discussion

Notes Receivable

Notes Receivable

Notes Receivable (continued)

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Computations for Promissory Notes

Illustrative Accounting Entries

Adjusting Entries

Adjusting Entries

Discussion

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Author: Needles & Powers