5short-terminvestments_receivables短期投资跟.ppt

A company with net sales of $850,000, a beginning balance of net receivables of $190,000, and an ending balance of net receivables of $230,000 has a days’ sales in receivables of: a. 99 days b. 92 days c. 90 days d. 82 days (c) A company with net sales of $850,000, a beginning balance of net receivables of $190,000, and an ending balance of net receivables of $230,000 has a days’ sales in receivables of: a. 99 days b. 92 days c. 90 days d. 82 days (c) End of Chapter 5 Speeding Up Cash Flow Credit Card or Bankcard Sales Selling Receivables Both methods result in financing expense. Acid Test Ratio Measure of liquidity More stringent than the current ratio Acid-test ratio Cash Short-term investments Net current receivables + + Total current liabilities = Days’ Sales in Receivables Compute one day’s sales (net sales / 365 days) Compute days’ sales in receivables (average receivables / one day’s sales) EXERCISE-TRUE/FALSE Marketable securities are investments that a company is actively attempting to sell. False Short-term investments may be divided into held-to-maturity securities, trading securities, and available-for-sale-investments. true EXERCISE-TRUE/FALSE Trading securities are considered to be current assets. True Trading securities are reported on the balance sheet at their historical cost. false EXERCISE-TRUE/FALSE Realized gains and losses are computed by comparing cash received at the time of sale to the original cost of the assets. False Unrealized gains and losses on trading securities are reported as part of current income. true EXERCISE-TRUE/FALSE Notes receivable collected in installments can appear on a balance sheet as both a current asset and a long-term asset. True Trade receivables are amounts to be collected from customers from the sale of goods and services. true EXERCISE-TRUE/FALSE Subsidiary records provide detailed information about control accounts. True Under the allowance method, the entry to record the estimated bad debts for the period