Term
| What is the point of internal controls (4) |
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Definition
to safeguard assets of company
Encourage company policy
Efficiency
Ensure accurate accounting Records |
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Term
| What is the purpose of the Sarbanes-Oxley Act? |
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Definition
| It makes the CEO and CFO attest that the financial statements are free of fraud. |
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Term
| What are the monitor control precautions |
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Definition
| Internal auditor will monitor to make sure they are followed. |
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Term
| What are the control procedures? |
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Definition
1. Know the assets
2. Make employee responsibilities separated (to prevent fraud)
3. audits watch the internal control procedures |
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Term
| What is a point of sale terminal? |
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Definition
| Records a sale as soon as it happens. |
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Term
| What are the procedures that should be taken for cash sales? |
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Definition
1. Use a point of sale terminal
2. keep drawer closed
3. Have manager AND cashier count and make deposit. |
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Term
| What should be the procedures for Checks? |
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Definition
1. Come in threw the mail to the mailroom
2. Two people in mail room write down all checks on a piece of paper
3. take the checks to the treasurer who endorses and deposits the check into the bank.
4. Mailroom then sends copy of sheet to accounting. Treasurer sends deposit slip. |
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Term
| What significant about deposits in a business account? |
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Definition
| You can't draw money back out. |
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Term
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Definition
| Electronic funds transfer |
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Term
| What is a major bonus of having a checking account in terms of keeping track of your cash? |
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Definition
| Both the bank and the company keep track of it. |
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Term
| What is an accounts receivable? |
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Definition
| Amount owed from the customers |
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Term
| What is an uncollectable account and what KIND of account is it? |
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Definition
| An uncollectable account is an accounts receivable that will never be collected. It is an expense. |
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Term
| What are the two methods to record uncollectable accounts? |
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Definition
| Direct write-off and Allowance method |
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Term
| Why don't we use the direct write off method? |
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Definition
| Because the current accounts receivable isn't accurate until the end of the year. |
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Term
| What is the second part to the matching principle? |
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Definition
| If you have an expense directly cost by a revenue, record both in the same accounting year. |
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Term
| How does the estimating method work? |
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Definition
| You take a percentage of accounts receivable aging. |
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Term
| What is another method for accounting for bad debt estimations? |
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Definition
| the percentage off net sales. |
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