Acct 201 Chpt 7

Front 1

Internal control

Back 1

The organizational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting records.

Front 2

Public company

Back 2

A company that sells its stock to the General Public.

Front 3

Internal control report

Back 3

A report by management describing its responsibility for and the adequacy of internal controls over financial reporting.

Front 4

Internal auditor

Back 4

An employee of the business who ensures the company's employees are following company policies, that the company meets all legal requirements, and the operations are running efficiently.

Front 5

External auditor

Back 5

An outside accountant, completely independent of the business, who evaluates the controls to ensure that the financial statements are presented fairly in accordance with the GAAP.

Front 6

Separation of duties

Back 6

Dividing responsibilities between two or more people to limit fraud and promote accuracy of accounting records.

Front 7

Encryption

Back 7

Rearranging plain text messages by a mathematical process comma the primary method of achieving Security in eCommerce.

Front 8

Firewall

Back 8

A device that enables members of a local network to access the network, well keeping now numbers out of the network.

Front 9

Collusion

Back 9

Two or more people working together to circumvent internal controls and defraud a company.

Front 10

Remittance advice

Back 10

An optional attachment to a check that tells the business the reason for the payment.

Front 11

Lockbox system

Back 11

Is this an in which customers send their checks to a post office box that belongs to a bank. The bank employee empties the Box Daly and record the deposits into the company's bank account.

Front 12

Evaluated Receipts Settlement (ERS)

Back 12

A procedure that compresses the payment approval process into a single step by comparing the receiving report to the purchase order.

Front 13

Electronic data Exchange (EDI)

Back 13

A streamlined process that bypasses paper documents all together. Computers of customers communicate directly with the computers of suppliers to automate routine business transactions.

Front 14

Petty cash

Back 14

A fun containing a small amount of cash that is used to pay for minor expenditures.

Front 15

Imprest system

Back 15

A way to account for petty cash by maintaining a constant balance in the petty cash account. At anytime, Cash + petty cash tickets must total the amount allocated to the petty cash fund.

Front 16

Signature card

Back 16

The card that shows each authorized person signature for bank account.

Front 17

Deposit ticket

Back 17

A bank form that is completed by the customer and shows the amount of each deposit.

Front 18

Check

Back 18

A document that instructs a bank to pay the designated person or business as specified amount of money.

Front 19

Maker

Back 19

The party who issues the

Front 20

Payee

Back 20

The individual or business to whom the check is paid.

Front 21

Routing number

Back 21

On a check, the 9 digit number that identifies the bank upon which the payment is drawn.

Front 22

Account number

Back 22

On a check, the number that identifies the account upon which the payment is drawn.

Front 23

Bank statement

Back 23

A document from the bank that reports the activity in the customer's account. It shows the bank accounts beginning and ending balances and list the months cash transactions conducted through the bank account.

Front 24

Cancelled checks

Back 24

Physical or scanned copies of the makers cashed or paid checks.

Front 25

Electronic funds transfer

Back 25

A system that transfers cash by electronic communication rather than by paper documents.

Front 26

Bank reconciliation

Back 26

A document explaining the reasons for the difference between a depositors cash records, and the depositors cash balance in his bank account.

Front 27

Timing difference

Back 27

Difference that arises between the balance on the bank statement and the balance on the company's books because of a time lag in recording transactions.

Front 28

Deposit in transit

Back 28

A deposit recorded by the company but not yet but it's Bank.

Front 29

Outstanding check

Back 29

A check issued by a company and recorded on its books but not yet paid by its Bank.

Front 30

Credit memorandum

Back 30

An increase in a bank account.

Front 31

Debit memorandum

Back 31

A Decrease in a bank account.

Front 32

Nonsufficient funds check

Back 32

A check for which the makers bank account has insufficient money to pay the check.

Front 33

Cash ratio

Back 33

A measure of a company's ability to pay current liabilities from cash and cash equivalents: (cash + cash equivalents)/total current liabilities.

Front 34

Cash equivalent

Back 34

A highly liquid Investments that can be converted into cash in three months or less.