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Accounting Ch 8&9
Chp 8 & 9 terms
|reported that explains the difference between the book (company) balance of cash and the cash balance reported on the bank statement.
|Bank report on the depositors’ beginning and ending cash balances, and a listing of his changes for a period.
|Checks that the bank has paid and deducted from the depositors account.
|Includes currency, coins and amounts on deposit in checking or savings accounts.
|Short term investment assets that are readily convertible to a known cash and amount or sufficiently close to their maturity date (Usually within 90 days), so that the market value is not sensitive to interest rate changes
|Cash Over and Short
|Income statement account used to record cash overages and cash shortages arising from errors and cash receipts or payments.
|Document signed by a depositor been struck in the bank to pay a specified amount to a designated recipient.
|Another name for a cash disbursement journal in the journal has a column for check numbers.
|Committee of Sponsoring Organizations (COSO)
|Committee devoted to improving the quality of financial reporting through effective internal controls consisting of five interrelated components along with other mechanisms.
|Days’ sales uncollected
|Measure of the liquidity of receivables computed by dividing the current balance the receivables by the annual credit (or net) sales, and then multiplying by 365.
|List items such as currency coins and checks deposited and their corresponding dollar amounts.
|Deposits in transit
|Deposits recorded by the company but not yet recorded by its bank.
|Expenses resulting from not taking advantage of cash discounts on purchases.
|Electronic funds transfer (EFT)
|Use of electronic communication to transfer cash from one party to another.
|Method of recording purchase is at the full invoice price without deducting any cash discounts.
|Internal control system
|All policies and procedures used to protect assets, ensure reliable, accounting, promote efficient operations, and urge adherence to company policies.
|Itemized record of goods prepared by the vendor that list the customer’s name items sold sales prices and terms of sale.
|Document containing a checklist of steps necessary for approving the recording and payment of an invoice.
|Resources such as cash that are easily converted into other assets are used to pay for goods services or other liabilities.
|Availability of resources to meet short
|Method of recording purchases at the full invoice price, less any cash discounts.
|Checks written and recorded by the depositor but not yet paid by the bank at the bank statement date.
|Small amount of cash in a fund to pay minor expenses accounted for using an imprest system.
|Principles of internal control
|principles prescribing management to establish responsibility maintain records to insure assets separate recordkeeping from custody of assets to divide responsibility for related transactions apply signal technological controls and perform reviews.
|document use by the purchasing department to place an order with a seller or vendor.
|document listing merchandise needed by a department and requesting it be purchased.
|form used to report the order goods are received and to describe their quantity and condition.
|created the public Company accounting oversight Board regulates analyst conflicts and poses corporate governance requirements enhances accounting and control disclosures impacts insider transactions and effective laws establishes new types of criminal con
|Section 404 (of SOX)
|requires that company management document and assess the effectiveness of all internal control processes that can affect financial reporting company auditors express an opinion on whether management's assessment of effectiveness of internal controls is fa
|includes the signatures of each person authorized to sign checks on the bank account.
|buyer of goods or services.
|seller of goods or services.
|internal file used to store documents and information to control cash disbursements and to ensure that a transaction is properly authorized and recorded.
|journal in which all vouchers are recorded after they have been approved.
|procedures and approvals designed to control cash disbursements in the sentence of obligations.
|amounts due from customers for credit sales, backed by the customers general credit standing.
|Accounts receivable turnover
|measure of both the quality and liquidity of accounts receivable indicates how often receivables are received and collected during the period computed by dividing net sales by average accounts receivables
|Aging of accounts receivable
|process of classifying accounts receivable by how wrong they are past due for purposes of estimating uncollectible accounts.
|Allowance for Doubtful Accounts
|Contra asset account with a balance approximating uncollectible accounts receivable.
|Procedure that estimates and matches bad debts expense with its sales for the period and /or reports of accounts receivable at estimating realizable value.
|Accounts of customers who do not pay what they have promised to pay an expanse of selling on credit.
|Direct write off method
|method that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible no attempt is made to estimate that debts.
|charge for using money loaned from one entity to another.
|Maker of the note
|entity who signs a note and promises to pay it at maturity.
|Matching (expense recognition) principle
|describes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
|prescribed the accounting for items that significantly impact the financial statement and any inferences from them . Adhere strictly to GAAP.
|Maturity date of a note
|date when a Notes principal and interest are due.
|Payee of the note
|Entity to home a note is made payable
|Principal of a note
|amount that the signer of a note agrees to pay back when it matures. Not including interest.
|written promise to pay a specified amount either on demand or at a definite future date.
|expected proceeds from converting an asset into cash.