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Managing Temporary Investments & Receivables: A Financial Guide

Learn about temporary investments, notes maturation, cash receipts, and more. Discover how to record transactions and optimize cash flow through short-term investments easily. Enhance your financial acumen with practical tips.

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Managing Temporary Investments & Receivables: A Financial Guide

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  1. Chapter 8 Temporary Investments & Receivables

  2. Temporary Investments or Short-Term Investments Converted to cash easily They are an available source of cash

  3. Purchase of Notes due on dd-mm-yy DR Temporary Investments $X CR Cash $X

  4. Recording Maturation of Notes DR Cash $X + interest CR Temporary Investments $X CR Interest Earned $interest Received cash proceeds from matured notes

  5. Purchase of Shares + Broker’s commission (# of shares x price) + broker’s commission DR Temporary Investments $X CR Cash $X

  6. Receipt of Cash Dividends DR Cash $X CR Dividends Earned $X

  7. Sale of shares Sale of shares – broker’s commission DR Cash $X DR Loss on Sale of Temporary Investments $Y CR Temporary Investments $X + $Y

  8. Handout • QS 8-1 • QS 8-2

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