MGCR 211 Lecture Notes - Lecture 5: Interest, Promissory Note, Accounts Receivable
3 Sep 2016
School
Department
Course
Professor
Document Summary
An asset with purchasing power, recorded at face value. A medium of exchange where ownership is evidence by possession. Difficult to control and prevent loss or theft. Bank reconciliation to ensure accounting records agree with bank records. Surplus cash that has been invested in marketable securities. Classified by liquidity (current assets are highly liquid, non-current are solvent) Historical cost (changes in market value have no effect) Gains or losses are recognized only upon sale. Fair market value (changes in the market have an effect) Changes in market value are reported as unrealized gains or losses. Other income is recognized when interest or dividend are received. Lower of cost and market (lcm) value combines the two methods. Amounts owed from customers for goods and services on credit. Uncertainty that the customer will pay (bad debts) Time value of money will impact long-term receivables. Show receivable at the gross payment amount, minus allowances for bad debts.
