BUS 251 Chapter Notes - Chapter 6: Financial Statement, Accounts Receivable, In Step

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Cash is presented at its face value at the reporting date (date financial position is being prepared at). Cash may also be held in foreign currencies so these amounts will be converted into cad at the time of preparation. Companies usually prepare their financial statements using the currency of the country in which they are head quartered. Adding signitures to documents so independent ppl can be identified. Companies sell on account to increase overall sales and also to generate revenue from interest. However selling on account increases cost with staff (having to have someone look over people creditworthiness and follow up with customers on payment). Additionally there can be bad debt expense for those who don"t pay their accounts. A/r are reflected at their carrying amount (face value afda). Allowance for doubtful accounts (afda) is a contra-asset account (normal balance is credit). When companies use this they are using the allowance method.