Discussion Post
• Briefly describes the flow of cash among receivables, cash, and marketable securities.
• Different categories of financial assets are valued differently in the balance sheet. These different valuation methods have one common goals. Explain.
• What are cash equivalents? Provide two examples why are the items often combined with cash for the purpose of balance sheet presentation?
• Why are investments in marketable securities shown separately from cash equivalents in the balance sheet?
• Explain the fair value adjustment procedure for marketable equity securities.
• Explain the relationship between the matching principal and the need to estimate uncollectible accounts receivable.
• In making the annual adjusting entry for uncollectible accounts, a company may utilize a balance sheet approach to make the estimates, or it may use an income statement approach. Explain these two alternative approaches.
• Explain how each of the following is presented in a multiple-step income statement .
o Sales of marketable securities at a loss.
o Adjusting entry to create ( or increase ) the allowance for doubtful accounts.
o Entry to write off an uncollectible account against the allowance
o Adjusting entry to increase the balance in the marketable securities account to a higher market value.
• What is the formula for computing interest on a note receivable, and what does each term means?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.