Bài giảng Kế toán, kiểm toán - Chapter 5: Accounting for and presentation of current assets

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.Chapter 5Accounting for and Presentation of Current AssetsPowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPAShort-term SecuritiesCurrent assets include cash and those assets that are expected to be converted to cash or used up within one year, or an operating cycle, whichever is longer.CashAccounts and Notes ReceivablePrepaid ExpensesCurrent Assetsinclude What are Current Assets?5-3Coins and paper moneyChecking accountsMoney ordersUndeposited receiptsPetty cash fundsCash IncludesLO 1Cash5-4Internal Control Over CashRequire daily deposits.Make all payments by check.Promptly reconcile bank statements.Internal control objectives are to ensure:Effective and efficient operations.Reliable financial reporting.Compliance with applicable laws and regulations.LO 2The Internal Control System5-5Identify Differences BetweenEnding cash balance reported on bank statementCompared toEnding cash balance in depositor’s accounting records.Provides information for adjusting journal entries.LO 3Bank Reconciliation Objective5-6Bond InvestmentsCapital Stock InvestmentsCurrent AssetsAlmost As Liquid As CashReadily MarketableMarketable Securities are . . .LO 4Short-term Marketable Securities5-7 If a company makes credit sales to customers, some accounts inevitably will turn out to be uncollectible.PAST DUELO 5Uncollectible Accounts5-8Balance Sheet PresentationThe net realizable value is the amount of accounts receivable that the business expects to collect.LO 55-9A note is a writtenpromise to pay a specific amount at a specific future date.Notes ReceivableNotes typically include an interest charge for use of the money during the time period of the note.LO 65-10InventoryGoods ownedand held for saleto customersCurrent assetInventoriesLO 75-11Specific identificationLIFOWeighted-averageFIFOWe use one of these inventory valuation methods to determine cost of inventory sold.Inventory Cost Flow AssumptionsLO 85-12 Specific IdentificationWhen a unitis sold, the specific cost of the unit sold is added to cost of goods sold.LO 85-13Cost of Goods Available for Sale During the YearUnits Available for Sale During the Year÷Weighted-AverageCalculate the average cost of the items in beginning inventory plus purchases made during the year.LO 85-14Costs of Goods SoldOldest CostsEnding InventoryRecent CostsFirst-In, First-Out (FIFO)LO 85-15Recent CostsEnding InventoryOldest CostsLast-In, First-Out Method (LIFO)Costs of Goods SoldRecent CostsLO 85-16Inventory Accounting System AlternativesPeriodic Inventory SystemCost of goods sold is determined at the end of the fiscal period.Cost of goods sold is determined each time inventory is sold.Perpetual Inventory SystemLO 85-17End of Chapter 55-18