(BQ) Part 2 book "Financial accounting" has contents: Cash and receivables, current liabilities and fair value accounting, long term assets, the statement of cash flows, financial performance measurement, financial performance measurement, investments | CHAPTER 7 DECISION POINT A User’s Focus Hewlett-Packard Company Hewlett-Packard (HP) is one of the largest HP’S FINANCIAL HIGHLIGHTS and best-known companies in the computer (in millions) industry. It sells its computers, printers, and related products to individual consumers; small and large businesses; and government, health, and education organizations. Like any company that sells on credit, HP must give its customers time to pay for their purchases, but 2009 2008 2007 Cash $ 13,279 $ 10,153 $ 11,293 Accounts receivable, net 16,537 16,928 13,420 Total current assets 52,539 51,728 47,402 Net revenue 114,552 118,364 104,286 at the same time, it must have enough cash on hand to pay its suppliers. As you can see in HP’s Financial Highlights, cash and accounts receivable have made up over 50 percent of the company’s current assets in recent HP must therefore plan and control its cash 1. How can the company control its cash needs? 2. How can the company evaluate its credit policies and the level of its receivables? Justin Sullivan/Getty Images News/Getty Images flows very carefully. Questions Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Cash and Receivables LEARNING OBJECTIVES Identify and explain the management and ethical issues related to cash and receivables. (pp. 328–333) Define cash equivalents and explain methods of controlling cash, including bank reconciliations. FOCUS ON FINANCIAL STATEMENTS (pp. 334–337) Revenues Apply the allowance method of accounting for uncollectible accounts. (pp. 337–343) Define promissory note and .
