MGCR 211 Study Guide - Final Guide: Debits And Credits, United States Treasury Security, Market Liquidity

• School: McGill University
• Department: Management Core
• Course: MGCR 211
• Professor: Erica Pimentel

Document Summary

Lectures 12 & 13 -- cash & short term investments. Drives decisions and projects that management can undertake. Necessary to survive in the short and long term. Controls important because cash has value and existence of motives for stealing. Need controls to ensure proper management in the business. Bank reconciliation: accounting records based on accrual accounting; recorded as they occur. Bank statements only show transactions when cash is received or paid from account. Short term investments: investments made for a short period of time that could be converted into cash quickly. Debt securities, treasury bills, bonds, equity securities, commercial papers, etc. Active security trading = easier to determine value and convert security into cash. Investment in shares of another company = dividend income --> income statement account. Accounts receivable: amounts owed by the customer from normal business transactions of selling goods or services on credit. No payment = expense for the company --> bad debt expense.