Chapter 7
Cash and Cash Equivalents
Disclosure of Cash Equivalents—Walgreen Co.
Internal Control
Internal Control
Internal Control Procedures—Cash Receipts
Internal Control Procedures— Cash Disbursements
Restricted Cash
Compensating Balances
Effective Interest Rate Higher Than the Stated Rate on the Debt
Trade Discounts and Cash Discounts
Cash Discounts: Gross Method vs. Net Method
Illustration: Gross Method vs. Net Method
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Subsequent Valuation of Accounts Receivable
Sales Returns
Illustration: Accounting for Sales Returns
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Sales Returns (Damaged or Defective)
Accounting Treatment for Merchandise Returns
Uncollectible Accounts Receivable
Two Approaches to Estimating Bad Debts
Illustration: Income Statement Approach
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Using Two Approaches Together
Using Two Approaches Together (Illustration continued)
When Accounts Are Deemed Uncollectible
If Previously Written-Off Accounts Are Collected
Direct Write-Off of Uncollectible Accounts
Measuring and Reporting Accounts Receivable
Notes Receivable
Interest-Bearing Notes
Illustration: Interest-Bearing Notes
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Noninterest-Bearing Notes
Illustration: Noninterest-Bearing Notes
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Illustration: Long-Term Notes Receivable
Illustration: Notes Received Solely for Cash
Subsequent Valuation of Notes Receivable
Financing with Receivables
Secured Borrowing
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Sale of Receivables
Sale of Receivables
Sale of Receivables
Illustration: Factoring and Securitization
Illustration: Accounts Receivable Factored Without Recourse
Illustration: Accounts Receivable Factored with Recourse
Transfers of Notes Receivable (Discounting)
Illustration: Transfers of Notes Receivable (Discounting)
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Slide 61
Illustration: Preference for Transfer as a Sale
Considering Transfer of Receivables as Sale
Accounting for the Financing of Receivables
Disclosures
Decision Makers’ Perspective: Receivables Management
Decision Makers’ Perspective: Receivables Management
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International Financial Reporting Standards
International Financial Reporting Standards
Cash Controls: Bank Reconciliation
Bank Reconciliation—Reconciling Items
Illustration: Bank Reconciliation
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Cash Controls: Petty Cash
Illustration: Petty Cash Fund
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Accounting for Impairment of a Receivable
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Illustration: Receivable Impairment
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Illustration: Receivable Impairment with Modified Terms
Illustration: Debt Settled at the Time of a Restructuring
Where We’re Headed
Where We’re Headed
End of Chapter 7