Ch. 3 - Financial Instruments - Cash and Receivables

Question 1

Cash includes - examples

Answer 1

1. chequing and savings accounts
2. foreign currency that can be easily converted to operating currency
3. term deposits with maturity of 3 months or less
4. treasury bills with maturity of 3 months or less

Question 2

Cash exclusion - examples

Answer 2

1. restricted cash
2. publicly traded shares and bonds
3. term deposits with maturity of over 3 months
4. foreign currency with limited exchange

Question 3

Restricted Cash - examples

Answer 3

1. minimum balance requirements in accounts
2. funds held in escrow
3. donations provided for a specific purpose

Question 4

Cash - IFRS #

Answer 4

7

Question 5

Accounts Receivable - IFRS #

Answer 5

9

Question 6

AR recording - options

Answer 6

1. Cost
2. FVTOCI
3. FVTPL

Question 7

AR Recording - When to record at cost

Answer 7

If:

1. it is held to receive contractual cash flows
2. the term are for specific dates for principal and interest

Question 8

AR Recording - When to record at FVTOCI

Answer 8

if the company will collect cash flows or sell the AR balance

Question 9

AR Recording - When to record at FVTPL

Answer 9

if the company is holding the AR to actively sell them as part of a portfolio

Question 10

AR - payment discount

- how to record

Answer 10

record the full amount of AR, then decrease sales or debit discounts when cash is collected