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Definition
| cash, short-term investments, and receivables, and are managed to pay bills and earn a return |
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Definition
| short term investments, usually with a maturity date of less than three months, and have little risk of market value changes |
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Definition
| not available for paying current liabilities, classified as an investment on the balalnce sheet |
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Definition
| an agreement between a bank and a business where the bank agrees in advance to lend a specific amount of money to the business |
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| The Statement of Cash Flows summarizes |
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Definition
| cash transactions for the period and explains the change in cash and cash equivalents for the period. |
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| On May 5th, XBAR, Inc.’s cash drawer was counted and found to be $10 over. |
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Definition
Cash 10 Cash Over and Short 10 |
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| Entries made for the book side only Amount of revenue earned |
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Definition
Cash 30 Interest Revenue 30 |
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| Correct error made and create account for insufficient fund |
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Definition
Supplies Inventory 28 Accounts Receivable 225 Cash 253 |
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| Foster Corporation purchases as a short term investment 4,000 shares of The Coca-Cola Company on December 1. Foster paid $43.98 per share, plus a brokerage commission of $80 |
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Definition
(4000*43.98)+$80=176000 Marketable Securities 176000 Cash 176000 |
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On December 15, Foster Corporation receives a $0.30 per share dividend on its 4,000 shares of Coca-Cola. |
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Definition
4000*$0.30=1200 Cash 1200 Dividend Revenue 1200 |
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(23.04*50)-20 On December 18, Foster Corporation sells 500 shares of its Coca-Cola stock for $46.04 per share, less a $20 brokerage commission. |
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Definition
Cash 23000 Marketable Securities 22000 Gain on Sale of Investment 1000 |
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| On December 31, Foster Corporation’s remaining shares of Coca-Cola capital stock have a current market value of $42,000. Prior to any adjustment, the company’s Marketable Securities account has a balance of $44,000(1,000*$44 per share). |
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Definition
Unrealized Loss $42000-$44000=(2000) Unrealized Holding Loss on Invest.2000 Marketable Securities 2000 |
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Term
| Reflecting Uncollectible Accounts in the Financial Statements |
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Definition
Uncollectible Accounts Expense (Asset) $$$$ Allowance for Doubtful Accounts (Contra Ass.) $$$$ |
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Term
| Writing Off an Uncollectible Account Recievable |
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Definition
Allowance for Doubtful Accounts $$$$ Accounts Receivable (X Customer)$$$ |
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Term
| Assume that on January 5, K-Max determined that Jason Clark would not pay the $500 he owes. K-Max would make the following entry. |
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Definition
Allowance for Doubtful Accounts 500 Accounts Receivable (Clark)500 |
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| Estimating Credit Losses – The Income Statements Approach |
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Definition
Net Credit Sales *%Estimated Uncollectible Amount of Journal Entry |
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Term
Assume EastCo already had a five hundred dollar balance in Allowance for Doubtful Accounts. Previous computation had $850 |
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Definition
Uncollectible Accounts Expense 500 Allowance for Doubtful Accounts 500 |
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Term
| On November 1, 2007, Hall Company would make the following entry. Notes Receivable 10000 Accounts Receivable (Porter Company) 10000 Interest=Principal*Interest Rate*Time On December 31, Hall Company needs an adjusting entry to record interest revenue on the Porter Company notes. Let’s look at that entry. |
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Definition
10,000*12%*60/360 Interest Receivable 200 Interest Revenue 200 |
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| What entry would Hall Company make on the maturity date |
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Definition
10,000*.12*90/360=300 Cash 10,300 Interest Receivable 200 Interest Revenue 100 Notes Receivable 10,000 |
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Term
| If Porter Company defaulted on the note, Hall Company would make the following entry on the maturity date. |
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Definition
Accounts Receivable 10,300 Interest Receivable 200 Interest Revenue 100 Notes Receivable 10,000 |
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Term
| Average Accounts Receiavable |
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Definition
| (Beginning Accounts Receivable + Ending Accounts Receivable)/2 |
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Term
| Accounts Receivable Turnover ratio |
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Definition
| Net Sales/Average Accounts Receiavable |
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Term
| Average Number of Days to Collect Accounts Recievable |
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Definition
| Days in year/Accounts Receivable Turnover Ratio |
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