Essay About B. Flow Of Costs And Statement Of Cash Flows Column

Accounting for and Presentation of Current Assets
CHAPTER
Accounting for and Presentation of Current Assets
CHAPTER OUTLINE:
I. Preliminary topics
A. Operating Cycle
B. Expansion of the Horizontal Model: Statement of Cash Flows column
II. Cash and Cash Equivalents
A. Balance sheet valuation — amount available
B. The Bank Reconciliation as a Control Over Cash
1. Timing differences
a. Deposits in transit
b. Outstanding checks
c. Charges for bank services
d. Interest added to the account
e. NSF checks
2. Errors
3. Adjustments required
III. Short Term Marketable Securities
A. Reasons for investing in debt and equity securities
B. Balance sheet valuation
C. Interest accrual
IV. Accounts Receivable
A. Balance sheet valuation — net realizable value
B. Bad debts/uncollectible accounts
1. Expense recognition/valuation adjustment
2. Write-off of uncollectible accounts
C. Cash discounts
1. Credit terms
2. Cash discounts subtracted from revenues in income statement
V. Notes Receivable
A. Comparison with accounts receivable
B. Interest accrual
VI. Inventories
A. Alternative generally accepted practices exist
B. Flow of costs from inventory to cost of goods sold
C. Inventory cost flow assumptions
1. Specific identification
2. Weighted average cost
3. FIFO
4. LIFO
D. The impact of changing costs (inflation/deflation)
E. The impact of inventory