Textbook Notes (363,229)
Canada (158,274)
RSM220H1 (54)
Xin Baohua (17)
Chapter 7

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University of Toronto St. George
Rotman Commerce
Xin Baohua

CHAPTER 7Cash and Receivables71LECTURE OUTLINEChapter 7 the first of six asset chapters covers cash accounts receivable and notesreceivableTemporary investments marketable securities are discussed later inChapter 18 along with longterm investmentsThis chapter can be covered in two class sessionsWith the exception of transfers ofreceivables with and without recourse students should have had previous exposure tothe chapter concepts in an elementary accounting courseThe following lecture outline is appropriate for this chapterACash and receivables represent two of the most liquid of assetsLiquidity is anindication of an enterprises ability to meet its obligations as they come dueBCash1Includes coin currency bank deposits including checking and savingsaccounts and negotiable instruments such as money orders cashiers checkspersonal checks and bank drafts2Postdated checks and IOUs should be reported as receivablesTraveladvances to employees should be reported as receivables or as prepaidexpensesPostage stamps on hand should be reported as office supplies oras prepaid expensesPetty cash funds and change funds should beincluded in cash3Bank overdrafts should be reported as current liabilitiesThey are not offsetagainst the cash account unless there is available cash in another account atthe same bank4Restricted cash72
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