Financial Statement Accounts

Question 1

Cash Equivalent

Answer 1

Items readily converted into cash with 90 days or less maturity.
EX: Cash is= Treasury bills money market
NOT cash = Treasury stock trading securities sinking fund comp lt borrowings restrictd postdated checks AFS securities

Question 2

Overdraft Fee IFRS vs. GAAP

Answer 2

GAAP= Liability
IFRS= net against cash

Question 3

Cash Basis Sales Equation for AR

Answer 3

AR beg + Sales - write offs -cust collections=Ending AR

Question 4

Allowance method for AR

Answer 4

Used most
is GAAP
doesn't change net AR or NI
IS approach est % sales
BS approach est %AR out

Question 5

Direct write off method for AR

Answer 5

NOT GAAP doesn’t match rev with exp writes off in period deemed noncollectable

Question 6

Contra Acct to AR

Answer 6

Allowance for unrec accts

Question 7

Contra to Sales

Answer 7

Sales return and allow

Question 8

Sales return and allowances

Answer 8

Reduction of AR for returns and damages can record gross or net if record as gross must recognize discount forfeited when cash received.

Question 9

Trade Discount

Answer 9

High volume or quantity factored in order in question when taking percent

Question 10

Cash discount

Answer 10

Early pmt after other discounts

Question 11

AR

Answer 11

accounts receivable to customer transaction is a trade rec presented at NRV almost always due 30-90 days so no interest presesnt