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23 Cards in this Set
- Front
- Back
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Expenditure Cycle |
- includes: purchasing, A/P, and cash disbursements -Purchase of goods and services from outside vendors - purchase of services from employees -often broken into purchases and C/D cycles |
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Input forms of the Expenditure Cycle |
- purchase requisitions - purchase orders - receiving reports - suppliers or vendors invoice - payment voucher |
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Risks of the Expenditure cycle: |
- goods are not needed are ordered - goods may be received that were not ordered - goods that were ordered are never received - goods may be lost or damaged in transit - suppliers may make errors in sales invoice |
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Input Edit Checks: |
- validity - field - echo - completeness - zero balances - posting checks |
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Administrative controls of the Expenditure Cycle: |
- CAR - Complete and up-to-date documentation - sound purchasing and payables policies used - Operating policies (SOPs) are clearly established and followed by employees - Multi level password system - Audit Reports |
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Accounting controls of the Expenditure Cycle: |
- documents are pre-numbered and well designed - Use of input edit checks - use of batch totals - Open transactions are closely monitored - Inventories done on a regular basis - Discount periods are closely monitored |
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2 Basic Types of Inventory Cycles: |
Retail and Manufacturing |
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The key to the expenditure cycle: |
Safeguarding |
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JIT |
just in time |
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EDI |
electronic data interchange |
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6 Basic Steps of the Expenditure Cycle: |
1. Determine when product is needed 2. Acquire product 3. Receive goods and inspect them 4. Return if unacceptable 5. Validate order 6. Pay cash to vendor |
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Sub-cycles in the Resource Management Cycle |
payroll, facilities, investments, financing, and production |
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Objectives of the Payroll Cycle |
- ensure that employee status, pay rates, and deductions are authorized - see that payroll payments are made for actual services rendered - promptly and properly record all employee wages and salaries |
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Input forms for the payroll cycle: |
- personnel action form - time and attendance forms/cards - job time tickets - paycheck (voucher stubs) - payroll register (summary) - payroll voucher -deposit slips |
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Administrative controls of payroll cycle: |
- CAR - complete documentation - use of clearly established SOPs - multi-level password systems - special terminals for payroll entries - use of audit reports |
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Accounting controls of payroll cycle: |
- use of pre-numbered source documents - use of software edit checks - input errors quickly corrected - use of precomputed batch totals - timecards approved by management |
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Investment Cycle |
relates to the buying and selling of stocks and bonds in other companies |
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5 Basic Production Documents |
1. Bill of material 2. Production Order 3. Materials requisition slip 4. Move tickets 5. Job time ticket |
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5 Types of Adjusting Entries |
1. asset-expense deferral 2. liability-revenue deferral 3. asset-revenue accrual 4. liability-expense accrual 5. valuation adjustments |
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Adjusting Entries |
journal entries prepared at the end of the accounting cycle to update a revenue or an expense account to its correct balance. |
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Closing Entries |
journal entries made at the end of the accounting cycle that make revenues and expenses and dividends have zero balances |
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Temporary Accounts |
Revenue, Expenses, Drawings |
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Permanent Accounts |
Asset, Liability, Owners Equity |
