Financial Assets-Effects of Transactions
Five Events Involving Financial Assets Are

question 39

Essay

Financial assets-effects of transactions
Five events involving financial assets are described below:
(a.) Sold merchandise on account.
(b.) Sold available-for-sale securities at a gain. Cash proceeds from the sale were equal to the current market value of the securities reflected in the last balance sheet.
(c.) Collected an account receivable.
(d.) Adjusted the allowance for impairment to reflect the portion of accounts receivable estimated to be uncollectible at year-end.
(e.) Made mark-to-market adjustment reducing the balance in the available-for-sale securities account to reflect a decrease in the market value of securities owned.
Indicate the effects of each independent transaction or adjusting entry upon the financial measurements shown in the four column headings below. Use the code letters, I for increase, D for decrease, and NE for no effect.
$\begin{array}{|c|c|c|c|c|} \hline& & & \text { Net Cash Flow } & \text { Net Cash Flow } \\\hline & & & \text { From Operating } & \text { (from Any } \\\hline \text { Transaction } & \text { Current Assets } & \text { Profits } & \text { Actitivities } & \text { Source) } \\\hline \mathrm{A} & \\\hline \mathrm{B} & \\\hline \mathrm{C} & \\\hline \mathrm{D} & \\\hline \mathrm{E} & \\\hline & \\\hline\end{array}$

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Definitions:

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