MGAC01H3 Lecture Notes - Cash Advance, Financial Statement, Accounts Receivable
3 Aug 2014
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Class q"s: e7-2, e7-19, p7-2, p7-13, case ic7-1. Learning goals: cash know how to present cash on financial statements, receivables understand recognition & measurement issues, receivables know how to record their sale and derecognition. Learning goal 1: cash know how to present cash on financial statements. Reporting cash some presentation issues include how to report the following: Learning goal 2: receivables understand recognition & Receivables these are claims that a company has against customers and others. They can be current or noncurrent, trade or nontrade (e. g. advances to employees). Do problem 7-2: notes receivable - the interest element is ignored for short-term notes and therefore they are carried at face value. However, long-term notes are recorded at the present value of the cash expected to be collected. For zero interest or unreasonable interest-bearing notes, an appropriate rate of interest must be determined in order to compute the present value of the note.
