金融性资产资料新(-)课件

Click to edit Master title style,Click to edit Master text styles,Second Level,Chapter 7,Financial Assets,How Much Cash Should a Business Have?,$,Every business needs enough cash to pay its bills!,How Much Cash Should a Business Have?,Cash,Short-term Investments,Receivables,Financial Assets,How Much Cash Should a Business Have?,Accounts,receivable,Marketable securities,(short-term investments),Cash(and cash equivalents),Collections from customers,Cash payments,揈,xcess?cash,is invested temporarily.,Investments are sold as cash is needed.,The Valuation of Financial Assets,Estimated collectible amount,Cash,Coins and paper money,Checks,Money orders,Travelers?checks,Bank credit card sales,Cash,is defined as any deposit banks will accept.,Combined with cash on balance sheet,Reporting Cash in the Balance Sheet,Liquid short-term investments,Stable market values,Matures within 90 days of acquisition,Cash Equivalents,Not available for paying current liabilities,Reporting Cash in the Balance Sheet,Not a current asset,Listed as an investment,揜,estricted?Cash,Bank agrees in advance to lend money.,Reporting Cash in the Balance Sheet,Liability is incurred when use line of credit.,Unused line of credit is disclosed in notes.,Lines of Credit,The Statement of Cash Flows,Summarizes cash transactions for an accounting period.,Statement of Cash Flows,Includes cash and cash equivalents.,Accurately account for cash.,Prevent theft and fraud.,Assure the availability of adequate amounts of cash.,Avoid unnecessarily large amounts of idle cash.,Cash Management,Using Excess Cash Balances Efficiently,Cash available for,long-term investment,may be used to finance growth and expansion of the business,or to repay debt.,Cash not needed for business purposes should be distributed to the companys,stockholders,.,Internal Control Over Cash,Segregate authorization,custody and recording of cash.,Prepare a cash budget.,Prepare a control listing of cash receipts.,Require daily deposits.,Make all payments by check.,Verify every expenditure before payment.,Promptly reconcile bank statements.,Cash Over and Short,Cash Over and Short is debited for shortages and credited for overages.,On May 5,XBAR,Inc.,抯,cash drawer was counted and found to be$10 over.,Bank Statements,Shows the beginning bank balance,deposits made,checks paid,other debits and credits in the month,and the ending bank balance.,Bank Statement,Reconciling the Bank Statement,Explains the difference between cash reported on bank statement and cash balance in depositor,抯,accounting records.,Provides information for reconciling journal entries.,Reconciling the Bank Statement,Balance per Bank,+Deposits in Transit,-Outstanding Checks,?Bank Errors,=Adjusted Balance,Balance per Depositor,+Deposits by Bank,(credit memos),-Service Charge,-NSF Checks,?Book Errors,=Adjusted Balance,Reconciling the Bank Statement,All reconciling items on the book side,require,an adjusting entry to the cash account.,Balance per Depositor,+Deposits by Bank,(credit memos),-Service Charge,-NSF Checks,?Book Errors,=Adjusted Balance,Reconciling the Bank Statement,Example,Prepare a July 31 bank reconciliation statement and the resulting journal entries for the Simmons Company.The July 31 bank statement indicated a cash balance of$9,610,while the cash ledger account on that date shows a balance of$7,430.,Additional information necessary for the reconciliation is shown on the next page.,Outstanding checks totaled$2,417.,A$500 check mailed to the bank for deposit had not reached the bank at the statement date.,The bank returned a customer,抯,NSF check for$225 received as payment of an account receivable.,The bank statement showed$30 interest earned on the bank balance for the month of July.,Check 781 for supplies cleared the bank for$268 but was erroneously recorded in our books as$240.,A$486 deposit by Acme Company was erroneously credited to our account by the bank.,Reconciling the Bank Statement,Example,Reconciling the Bank Statement,Example,Reconciling the Bank Statement,Example,Used for minor expenditures.,Petty Cash Funds,Has one custodian.,Replenished periodically.,Petty Cash Funds,Short-Term Investments,Bond Investments,Capital Stock Investments,Current Assets,Almost As Liquid As Cash,Readily Marketable,Marketable Securities are.,Mark-to-Market:A New Principle of Asset Valuation,Short-term investments in marketable securities appear on the balance sheet at their,current market value,as of the balance sheet date.,Lets turn our attention to accounts receivable.,Uncollectible Accounts,If a company makes credit sales to customers,some accounts inevitably will turn out to be uncollectible.,PAST DUE,Reflecting Uncollectible Accounts in the Financial Statements,At the end of each period,record an,estimate,of the uncollectible accounts.,Contra-asset account,Selling expense,The Allowance for Doubtful Accounts,The,net realizable value,is the amount of accounts receivable that the business expects to collect.,Writing Off an Uncollectible Account Receivable,When an account is determined to be uncollectible,it no longer qualifies as an asset and should be,written off,.,Writing Off an Uncollectible Account Receivable,Assume that on January 5,K-Max determined that Jason Clark would not pay the$500 he owes.,K-Max would make the following entry.,Writing Off an Uncollectible Account Receivable,Assume that before this entry,the Accounts Receivable balance was$10,000 and the Allowance for Doubtful Accounts balance was$2,500.,Let,抯,see what effect the write-off had on these accounts.,Writing Off an Uncollectible Account Receivable,Notice that the$500 write-off did,not,change the net realizable value nor did it affect any income statement accounts.,Recovery of an Account Receivable Previously Written Off,Subsequent collections require that the original write-off entry be,reversed before,the cash collection is recorded.,Monthly Estimates of Credit Losses,At the end of each month,management should,estimate,the probable amount of uncollectible accounts and adjust the Allowance for Doubtful Accounts to this new estimate.,At December 31,2001,MusicLand,抯,accounting records indicate the following:,Accounts Receivable=$50,000,Allowance for Doubtful Accounts=$200(credit),Past experience suggests that 5%of receivables are uncollectible.,What is,MusicLand,抯,Uncollectible Accounts Expense for 2001?,Monthly Estimates of Credit Losses,Example,Desired balance in Allowance for Doubtful Accounts.,Monthly Estimates of Credit Losses,Example,Lets look at another way to estimate the uncollectible accounts!,Estimating Credit Losses?The balance Sheet?Approach,Year-end Accounts Receivable is broken down into age classifications.,Each age grouping has a different likelihood of being uncollectible.,Compute a separate allowance for each age grouping.,Estimating Credit Losses?The balance Sheet?Approach,At December 31,2001,the receivables for,EastCo,Inc.were categorized as follows:,Estimating Credit Losses?The balance Sheet?Approach,At December 31,2001,the receivables for,EastCo,Inc.were categorized as follows:,Estimating Credit Losses?The balance Sheet?Approach,At December 31,2001,the receivables for,EastCo,Inc.were categorized as follows:,EastCo,抯,unadjusted balance in the allowance account is$500.,Per the previous computation,the desired balance is$1,350.,Estimating Credit Losses?The balance Sheet?Approach,Guess What!There is another alternative to estimate the uncollectible accounts!,An Alternative Approach to Estimating Credit Losses,Uncollectible accounts?percentage is based on actual uncollectible accounts from prior years?,credit sales,.,Focus is on determining the amount to record on the income statement as,Uncollectible Accounts Expense,.,An Alternative Approach to Estimating Credit Losses,An Alternative Approach to Estimating Credit Losses,In,2001,EastCo,had credit sales of$60,000.,Historically,1%of,EastCo,抯,accounts have been uncollectible.,For 2001,the estimate of uncollectible accounts expense is$600.,($60,000?.01=$600),Now,prepare the adjusting entry for December 31,2001.,An Alternative Approach to Estimating Credit Losses,Uncollectible AccountsSummary,%of Receivables,Emphasis on Realizable Value,Accts.Rec.,All.for Doubtful Accts.,Aging of Receivables,Emphasis on Realizable Value,Accts.Rec.,All.for Doubtful Accts.,Balance Sheet Focus,Balance Sheet Focus,%of Sales,Emphasis on Matching,Sales,Uncoll,.Accts.Exp.,Income Statement Focus,Direct Write-Off Method,This method makes,no attempt to match,revenue with the expense of uncollectible accounts.,Income Tax Regulations and Financial Reporting,Direct write-off method required to calculate taxable income.,Taxable Income,Financial Statement Income,GAAP,GAAP,GAAP,GAAP,Allowance methods better match expenses with revenues.,Internal Controls for Receivable,Separate the following duties:,Maintenance of the accounts receivable subsidiary ledger.,Custody of cash receipts.,Authorization of accounts receivable write-offs.,Management of Accounts Receivable,Credit Terms,Minimize Accounts Receivable,Extending credit encourages customers to buy from us.,.but it ties up resources in accounts receivable.,Ways to Minimize Amounts in Accounts Receivable,Selling Accounts Receivable,Credit Card Sales,Evaluating the Quality of Accounts Receivable,Accounts Receivable Turnover Rate,This ratio provides useful information for evaluating how efficient management has been in granting credit to produce revenue.,Net Sales,Average Accounts Receivable,Evaluating the Quality of Accounts Receivable,Avg.Number of Days to Collect A/R,This ratio helps judge the liquidity of a companys accounts receivable.,Days in Year,Accounts Receivable Turnover Ratio,End of Chapter 7,