Term
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Definition
| methods and measure adopted in an organization to safegurad assets, enhance reliability, increase efficency and ensure comliance |
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Term
| Internal Control Primary Components |
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Definition
A comtrol environment
Risk Assessment
Control Activities
Information and Communication
Monitoring |
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Term
| 6 principles of control activities |
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Definition
Establishment of Responsibility
Segregation of Duties
Documentation Procedures
Physical Control
Independent Internal Verification
HR Controls |
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Term
| Establishment of Responsibilities |
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Definition
One person is responsible for a given task
Ex. transfer of cash drawers |
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Term
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Definition
1). Different individuals should be responsible for related duties
2). Responsibility for record-keeping for an asset is different than physical custody of the asset |
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Term
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Definition
How a company documents
Ex). pre-numbered documents, all documents accounted, forward source documents for accounting entries to accounting dept. |
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Term
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Definition
the safe guarding of assets and enhance the accuracy and reliability of records
Ex). Safes, vaults, locked warehouses, pass-keys for computers, alarm to prevent break-ins, |
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Term
| Independent Internal Verification |
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Definition
the review of data prepared by employees
1). companies verify records periodically
2). employee who is independent of the personel responsibily makes the verification
3). discrepancies and exceptions should be reported
Ex. Internal auditors |
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Term
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Definition
| Bond Employees who handle cash, rotate employees duties and require employees to take vacation, conduct background checks |
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Term
| Accounts Recievable Turnover |
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Definition
| Net Credit Sales/ Avg. Net A/R |
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Term
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Definition
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Term
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Definition
Add: Note Collection, Deposit in Transit
Less: Outstanding Checks, bank charge |
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Term
| Cash Book balance (adjusted) |
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Definition
Add: Error on check
Less: check close, bank charge, EFT transfer |
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Term
| Gain on Disposal of Plant Asset |
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Definition
| Debit (less than book calue) |
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Term
| Loss on DIsposal of Plant Asset |
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Definition
| Credit (less than book value) |
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Term
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Definition
| Accounts Payable, Salaries and Wages Payable, Property Tax, Warranty Liability, Income Tax, Federal Income Tax, Current debt |
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Term
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Definition
| Currencies + Treasury Bill + Checks + Savings + Incoming Chekcs |
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Term
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Definition
Debit: Allowance for D/A
Credit: Accounts Recievable |
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Term
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Definition
Debit: Bad Debt Expensr
Credit: Allowance for D/A |
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Term
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Definition
| Sales or Revenue/ Avg. total Assets |
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Term
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Definition
| Net Income/ Avg. Total Assets |
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Term
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Definition
Debit:Amortization Expense
Credit: Patent/Goodwill/Franchise |
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Term
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Definition
| Current Assets/ Current Liabilities |
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Term
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Definition
Debt: Depreciation Expense
Credit: Accumulated Depreciation |
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Term
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Definition
| Principal Amount = Interest Owed / (Interest Rate * Months) |
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