Accounting 101-Chapter 6 Cash and Internal Control

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Accounting 101-Chapter 6 Cash and Internal Control
2015-06-26 12:27:56

Cash and Internal Control
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  1. Cash equivalent
    An investment that is readily convertible to a known amount of cash and has original maturity to the investor of three months or less.
  2. Bank Statement
    A detailed list, provided by the bank, of all activity for a particular account during the month.
  3. Outstanding check
    A check written by a company but not yet presented to the bank for payment
  4. Deposit in transit
    A deposit recorded on the books but not yet reflected on the bank statement.
  5. Bank reconciliation
    A form used by the accountant to reconcile or resolve any differences between the balance shown on the bank statement for a particular account with the balance shown in the accounting records.
  6. Credit memoranda
    Additions on a bank statement for such items as interest paid on the account and notes collected by the bank for the customer.
  7. Debit memoranda
    Deductions on a bank statement for items such as NSF checks and various service charges.
  8. Petty cash fund
    Money kept on hand for making minor disbursements in coin and currency rather than by writing checks.
  9. Internal control system
    Policies and procedures necessary to ensure the safeguarding of an entity's assets, the reliability of its accounting records, and the accomplishment of overall company objectives.
  10. Sarbanes-Oxley Act
    An act of Congress in 2002 intended to bring reform to corporate accountability and stewardship in the wake of a number of major corporate scandals.
  11. Internal control report
    A report required by Section 404 of the Sarbanes-Oxley Act to be included in a company's annual report in which management assesses the effectiveness of the internal control structure.
  12. Public Company Accounting Oversight Board (PCAOB)
    The five-member body created by the Sarbanes-Oxley Act that was given the authority to set auditing standards in the United States.
  13. Board of directors
    A group composed of key officers of a corporation and outside members responsible for general oversight of the affairs of the entity.
  14. Audit committee
    A board of directors subset that acts as a direct contact between the stockholders and the independent accounting firm.
  15. Accounting system
    Methods and records used to accurately report an entity's transactions and to maintain accountability for its assets and liablities
  16. Administrative controls
    Procedures concerned with efficient operation of the business and adherence to managerial policies.
  17. Accounting controls
    Procedures concerned with safeguarding the assets or the reliability of the financial statements.
  18. Internal audit staff
    The department responsible for monitoring and evaluating the internal control system.
  19. Purchase requisition form
    A form a department used to initiate a request to order merchandise
  20. Purchase order
    A form sent by the purchasing department to the supplier
  21. Invoice
    A form sent by the seller to the buyer as evidence of a sale.
  22. Blind receiving report
    A form used by the receiving department to account for the quantity and condition of merchandise received from a supplier.
  23. Invoice approval form (Voucher)
    A form the accounting department uses before making payments to document the accuracy of all information about a purchase.