TAILIEUCHUNG - Lecture Financial accounting (15/e) - Chapter 7: Financial assets

Define financial assets and explain their valuation in the balance sheet, describe the objectives of cash management and internal controls over cash, prepare a bank reconciliation and explain its purpose, describe how short-term investments are reported in the balance sheet and account for transactions involving marketable securities,. | Financial Assets Chapter 7 Chapter 7: Financial Assets How Much Cash Should a Business Have? How much cash should a business have? Every business needs enough cash to pay its bills. However, a business that has too much cash on hand is losing the ability to earn a return by investing their cash. Financial assets include cash, short-term investments, and receivables. Businesses manage the amounts in each of these categories to ensure they have enough cash to pay their bills and earn a return when possible. Cash needs can be met by collections on accounts receivable and by selling investments. Because most accounts receivable have payment due dates, businesses know when to expect payments from customers on their accounts. Businesses use this timetable for expected payments to help plan for future cash needs. When a business has excess cash on hand, it is typically invested. If the cash will be needed in the near future, then short-term investments are made. Some businesses have enough excess cash on hand to warrant overnight investing. Investing in short-term investments helps a business use its excess cash to earn a return until the cash is needed. Then the short-term investment is sold, and the cash is available for use. The Valuation of Financial Assets Estimated collectible amount On the balance sheet, cash and cash equivalents are reported at their face amount. Short-term investments are reported at their current market value. Accounts receivable are reported at their net realizable value. Net realizable value is the amount of the accounts receivable the business estimates it will actually collect. Cash Management Accurately account for cash. Prevent theft and fraud. Assure the availability of adequate amounts of cash. Prevent unnecessarily large amounts of idle cash. Cash management is a comprehensive system that helps accurately account for cash, helps prevent theft of cash and fraud, helps assure the availability of adequate amounts of cash, and .

• Kế toán - Kiểm toán
• Financial accounting
• Lecture Financial accounting
• Financial assets
• Cash management
• Bank statement
• Market value
• Issues in financial accounting
• Kế toán tài chính
• Financial statements
• Accounting standards
• Financial reporting
• Financial Accounting Standards Board
• Fundamental financial accounting
• Lecture Fundamental financial accounting concepts
• Financial statement
• Accounting cycle
• Accounting for accruals
• Accounting system
• Accounting activities
• Financial accounting practice
• Accounting information system
• Accounting terminology
• Reporting financial results
• Evaluating liquidity
• Business firms
• The financial reporting reform
• Accounting information
• Management accounting
• Accounting equation
• Accounting systems
• Decision making
• External financial reporting
• Accounting for business
• Lecture Accounting for business
• Financial accounting reports
• Statement of financial performance
• Accrual accounting systems
• Statement of financial position
• Mastering financial accounting essentials
• Financial accounting essentials
• Accrual accounting
• Income statement
• Accounting conventions
• Internal control
• Accounting for cash
• Accounting for receivables
• Computing uncollectible accounts expense
• Long term debt
• Accounting for long term debt
• Paper F3
• Revision kit 2016
• Accounting Financial
• Accounting Financial Review
• Financial Review accounting exam
• Study text 2016
• Language of business
• Double entry accounting system
• Credit terminology
• Merchandising businesses
• Accounting for merchandising businesses
• Accounting for inventories
• Cash discounts
• The accounting cycle
• International financial reporting standards
• Completing the accounting cycle
• Accounting worksheet
• Classified balance sheet