Chapter 12

Front 1

bill and hold transactions

Back 1

Transactions in which sales of merchandise are billed to customers prior to delivery, with the goods being held by the seller. These transactions may overstate revenues and net income if they do not meet specific requirements for recognition as sales.

Front 2

Bill of Lading

Back 2

A document issued by a common carrier acknowledging the receipt of goods and setting forth the provisions of the transportation agreement.

Front 3

Consignment

Back 3

A transfer of goods from the owner to another person who acts as the sales agent of he owner.

Front 4

Cost Accounting Standards Board

Back 4

A five-member board established by congress to narrow the options in cost accounting that are available under generally accepted accounting practices. Companies having significant supply contracts with certain US government agencies are subject to cost accounting standards established by the board.

Front 5

Electronic data interchange (EDI)

Back 5

A system in which data are exchanged electronically between the computers of different companies. In an EDI system, source documents are replaced with electronic transactions created in a standard format.

Front 6

Job time tickets

Back 6

A document designed to accumulate the labor and machine time devoted to a particular production order.

Front 7

Master production schedule

Back 7

A schedule that is used to plan overall production for a period of time. The schedule illustrates the gross production of each of the company's products.

Front 8

Observation

Back 8

The auditors' evidence-gathering technique of viewing a client activity to obtain physical evidence of performance

Front 9

Periodic inventory system

Back 9

A method of accounting in which inventories are determined solely by means of a physical inventory at the end of the accounting period.

Front 10

Perpetual inventory system

Back 10

A method of accounting for inventories in which controlling accounts and subsidiary ledgers are maintained to record receipts and issuances of goods, both in quantities and in dollar amounts. The accuracy of perpetual inventory records is tested periodically by physical inventories.

Front 11

Production order

Back 11

A document that authorizes the production of a specific quantity of a product.

Front 12

Purchase commitment

Back 12

A contractual obligation to purchase goods at fixed prices, entered into well in advance of scheduled delivery dates

Front 13

Specialist

Back 13

A person possessing special skill or knowledge in a field other than accounting or auditing, such as a real estate appraiser.