Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 7

Many companies hold a significant portion of their financial assets in the form of marketable securities.or example, Microsoft Corporation recently reported investments in marketable securities totaling $56.1 billion, an amount equal to 71 percent of its total financial assets.n contrast, only 20 percent of its financial assets were in the form of accounts receivable.
a.efine marketable securities (also referred to as short-term investments).hat characteristics of these securities justify classifying them as financial assets
b.hat is the basic advantage of Microsoft Corporation keeping financial assets in the form of marketable securities instead of cash Is there any disadvantage
c.xplain how Microsoft Corporation values these investments in its balance sheet.
d.iscuss whether the valuation of marketable securities represents a departure from (1) the cost principle and (2) the objectivity principle.
e.xplain how fair value accounting benefits the users of Microsoft Corporation 's financial statements.