--Future value of annuity due = (1+r) * P(((1+r)^n - 1)/r)
--Bonds: Dr. Cash, Cr. Discount, Cr. Bonds Payable (par value)
First entry for first payment of interest: Dr. Interest Expense, Cr. Cash, Cr. Discount on bonds payable
--Cash: coin, currency, available funds on deposit at bank, money order, certified checks, cashier’s checks, personal checks, bank drafts, and saving accounts. Inclunding Cash equivalents: T-bill, commercial paper, money mkt funds. Restricted: plant expansion, retirement of long term debt, compensating balances. Cash equivalents are short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates
--Reconciliation: bank: add: deposit transit, deduct: outstanding checks,
Book: add: collections not recorded, deduct: book charges not recorded (example!!!!!)
--Net realizable value: A/R-AFDA ---Dr. Bad debt exp Cr. AFDA
--Write off: Dr. AFDA Cr. A/R Recovery: Dr.A/R Cr.AFDA, Dr. Cash CrA/R
--A/R Turnover: evaluate liquidity of A/R, measure the number of time on avg a company collect A/R, Net sales/avg trade receivables
--direct write off: no matching, receivable not stated at cash realizable value, not GAAP
--allowance method: % of sales, % of receivables, GAAP requires
% of sales: better matching of exp and rev, any balance in AFDA is ignored
% of receivables: not matching, reports estimate of receivables at realizable value; one composite rate, an aging schedule ( most accurate)
--asset: future economic benefit inventory: items held for sale in ordinary course of business or goods to e used in the production of goods to be sold
--beginning inventory + cost of goods purchased = COGAS(available) = COGS + ending inventory
--perpetual: purchase are debited