ACC* - Accounting ACC* M115 Lecture Notes - Lecture 9: Accrued Interest
6 Jun 2020
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Cash from operations can be used to invest in: current operations, temporary investments (to earn additional rev, longterm investments of stock in other companies, cash current operations. Can replace worn out equip or buy btr ones. Expenses, pay suppliers, interest to creditors, divs to stockholders: temporary investments. Excess cash not needed for current operations (often happens if they have a seasonal operating cycle) Debt securities notes / bonds that pay interest + have a fixed maturity date. Equity securities ps / cs that represent ownership of another company. Both of these are temp investments & belong in current assets. Cash & cash equivalents investments (ex. Certificate of deposit) that normally don"t change in value are cash on the bal sht & are held for interest: longterm investments. May be held for the same objectives as temp investments, but usually involve purchase of significant stock of a company. Reduction of costs admin expenses, fewer managers.
