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Because of the large number of accounting scandals that involved misclassification on the balance sheet, FASB has paid particular attention to classification of cash and receivables in recent years.
Required:
1. Obtain the relevant authoritative literature on accounting for accounts receivable using the FASB's Codification Research System at the FASB website. What is the specific citation that describes disclosure of accounting policies for credit losses and doubtful accounts? List the disclosure requirements.
2. Determine the specific citation for accounting for each of the following items: 1. Accounts receivables from related parties should be shown separately from trade receivables. 2. The definition of cash equivalents. 3. Notes exchanged for cash are valued at the cash proceeds. 4. The two conditions that must be met to accrue a loss on an accounts receivable.
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