ACC E272 Lecture Notes - Lecture 2: Income Statement, Operating Expense, Accounts Receivable
Document Summary
Receivable- claims held against customers and others for money, goods or services. Current receivables- receivables to be collected within a year or the noc. Trade receivables- when customers owe a company of amounts for goods bought and services rendered from major ongoing operations. Accounts receivable- oral promises of the purchaser to pay for goods and services. Notes receivable- a written negotiable promise containing: the face(maturity sold value) of the note; payee (seller) of issuer (buyer), and it tells the credit term for maturity, interest, and frequency of payment. Advances to officers and employees, advances to subsidiaries, deposits paid to cover potential damage or losses, deposits paid as a guarantee of performance or payment, dividends, interest receivable and claims against insurance/gov"t/defendants under suit etc. Recognition (when): when it satisfies its performance obligation. Arm"s length transaction price (what amount)- list price; amount that a company expects to receive from a customer for transferring products/services.
