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23 Cards in this Set
- Front
- Back
Research has found three factors exist when fraud occurs. What are these factors? |
Incentive Rationalization Opportunity |
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What are the types of internal controls? |
Establish responsibility Segregate Duties Restrict access Document procedures Independently verify |
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Establish Responsibility |
Assign each task go only one employee |
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Segregate Duties |
Do not make one employee responsible for all parts of a process |
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Restrict Access |
Do not provide access to assets or information unless needed to fullfil assigned responsibility |
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Document procedures |
Prepare documents to show activities that have occurred |
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Independently verify |
Check others work |
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What goes on a bank statement while doing bank reconciliation? |
add; deposit in transition deduct; outstanding checks In company books, not bank statements |
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What goes in the company's books during a bank reconciliation? |
deduct; NSF checks & bank service charges |
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Putting money into a petty cash fund |
Debit petty cash Credit cash |
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Pay money out of a petty cash fund |
not recorded until replenished |
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Replenishing a petty cash fund |
debit supplies, travel expense, office expense Credit cash |
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Chas equivalents |
Short-term, highly liquid investments purchased within 3 my months of maturity Ex: certificates of deposit, money market funds, government Treasury bills |
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Net sales |
Total revenue - cost of sales returns, allowances & discounts |
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Bank reconciliation Add |
Deposit in transit NSF checks Service Charge |
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Bank Reconciliation Subtract |
Outstanding Checks ETF |
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Gross Profit |
Net Sales - Cost of Goods Sold |
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Gross Profit Percentage |
Net sales - Cost of Goods Sold ÷ Net Sales × 100 |
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Periodic |
Maintains separate accounts for purchases, transportation, etc |
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Perpetual |
up-to-date balance in the inventory accounts at all times |
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Inventory turnover ratio |
Cost of goods sold ÷ average inventory |
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What should the journal entry for a NSF check returned look like? |
Debit accounts receivable Credit Cash not enough funds to complete transaction |
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What should the journal entry look like for the EFT? |
Debit Cash Credit accounts receivable bank wired to account directly |