BU387 Chapter Notes - Chapter 7: Promissory Note, Balance Sheet, Impaired Asset
Document Summary
Chapter 7 cash and receivables: companies should monitor accounts receivable levels carefully to, minimize the stress on working capital and related bank debt, and to, encourage prompt payment from their customers. Reporting cash: reporting cash needs special attention in the case of the following: (1) restricted cash (2) cash in foreign currencies (3) bank overdrafts (4) cash equivalents. Ifrs allows some equity instruments can be classified as cash equivalents i. e. preferred shares acquired within a short time of their maturity date: cash equivalents are reported at their fair value. Cash discount for 2/10, n/30 customer will receive 2% discount if payment made within 10 days and the gross amount is due in 30 days. If there is no previous balance in the allowance for doubtful accounts then: dr. bad debt. If there is a credit balance of ,800 before the adjustment, the amount must be included in the allowance for doubtful accounts: dr. bad debt expense ,850 cr.
