1.What is cash equivalents?

2.What should be used as the initial measurement of accounts receivable?

3.What journal entries should be made for the impairment of accounts receivable in the following situation? Assume allowance method

**Management of Company A determined that 20% of its accounts receivable in the balance of $500,000 will not be collected.

4.If a Canadian company ordered goods from a company in China on F.O.B Shipping point terms. At the Canadian company's year-end, goods are in transit (ie. vessel carrying the goods are crossing the Pacific Ocean). Should the Canadian company recognize these goods as its inventory or not? And why?

5.Explain perpetual inventory system

6.If the cost of inventory is $100,000 and the current net realizable value is $90,000, what should be the balance of the inventory on the financial statement?