Auditing Ch 6 terms

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Auditing Ch 6 terms
2012-03-25 13:16:07
Auditing Assurance Louwers

Revenue and Collection Cycle
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  1. Aged trial balance
    A schedule that lists each individual receivable and indicates whether it is current or past due, and how long it is past due. The total should eaul the accounts receivable ledger balance
  2. Bill and hold
    A fraudulent financial reporting activity whereby a company recognizes a sale even though it does not ship the merchandise to the customer, but instead holds it in its own warehouse
  3. Bill of lading
    A contract between a seller and a common carrier to verify shipment of goods
  4. Dual-purpose procedure
    An audit procedure that simultaneously serves the substantive purpose (obtain direct evidence about the dollaf amounts in account balances) and the test of purpose (obtain evidence about the company's performance of its own control activities)
  5. Factor
    To sell accounts receivable to another party ( a factor) at a discount from face value
  6. Negative confirmation
    A letter sent to a customer by auditors requesting that the customer respond only if the balance is incorrect
  7. Packing slip
    a document included with a shipment that shows the description and quantity of the goods being shipped
  8. positive confirmation
    A letter sent to a customer by auditors requesting that the customer respond whether the balance is correct or not
  9. revenue recognition
    Recording revenues in the general ledger. This is often done fraudulently by schemes such as bill and hold
  10. Sales cutoff tests
    tests that ensure sales are recorded in the proper period - generally, when they are shipped - and that the costs of sales is recorded and removed from inventory
  11. sales invoice
    A bill send to customers for payment showing the amount due and payment terms