ADM 2342 Chapter 7: Accounting Chapter 7
16 Oct 2017
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Document Summary
Cash management and control is a key issue for many companies. Businesses rely on cash flow budgets to help anticipate cash needs and minimize borrowing requirements. Companies with surplus cash try to minimize idle cash by putting it into short-term deposits. Manufacturers and wholesalers often have a significant amount of accounts receivables. Manufacturers and wholesalers have accounts receivable relating to their sales transactions. Large accounts receivable balances are typical in the oil and gas industry- in part due to extended payment terms. For most companies, typical accounts-receivable-related categories include trade receivables, loans receivables, and nontrade receivables. A given that accounts receivables are related to sales. Some sales are overaggressive and this leads to bad debts and uncollectibles. Credit companies try to discourage this by having tight policies, but also need to make sure to find a balance, people are motivated by discounts. A contractual right to receive cash or another financial asset from another party.
