Every term, formula, and entry

Terms

C1 Internal control system

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The policies and procedures managers use to protect assets, ensure reliable accounting, and promote efficient operations.

C1 Sarbanes-Oxley Act (SOX)

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Federal law requiring management and auditors to assess and report on the effectiveness of a public company's internal controls.

C1 Committee of Sponsoring Organizations (COSO)

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A private group that publishes an influential internal-control framework used to design and evaluate controls. [book?] — check the exact framing this edition uses.

C1 Fraud triangle

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The three factors usually present for fraud to occur: opportunity, pressure, and rationalization.

C1 Principles of internal control

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The seven guidelines for designing a system that safeguards assets and produces reliable records.

C1 Separation of duties

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Dividing responsibility for related transactions among different people, so no one person controls a transaction start to finish.

C1 Bond

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An insurance policy that reimburses a company for losses from theft by a bonded employee.

C1 Collusion

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Two or more people working together to circumvent controls, such as separation of duties.

C2 Cash

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Currency, coins, and amounts on deposit that a bank will accept for immediate deposit.

C2 Cash equivalents

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Short-term, highly liquid investments that are both readily convertible to cash and close enough to maturity that their value is unaffected by rate changes.

C2 Liquidity

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A company's ability to pay for its near-term obligations.

C2 Liquid assets

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Assets easily converted into other asset types or used to buy services or pay liabilities.

C2 Cash over and short

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An income-statement account recording the income effect of a cash-count difference, expensed when short.

C2 Voucher system

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A set of procedures and approvals for controlling cash disbursements and their recording.

C2 Voucher

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A document authorizing a cash payment.

P1 Petty cash

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A small amount of cash kept on hand to pay minor amounts, managed under an imprest system.

P1 Petty cashier

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The person responsible for a petty cash fund and its receipts.

P2 Bank statement

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A bank's record of a depositor's account activity and balance over a period.

P2 Canceled checks

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Checks the bank has paid and charged against the depositor's account.

P2 Deposit in transit

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A deposit recorded by the depositor but not yet received or recorded by the bank.

P2 Outstanding checks

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Checks written and recorded by the depositor but not yet paid by the bank.

P2 Nonsufficient funds (NSF) check

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A check the payer's bank refuses to pay, usually for lack of funds in the payer's account.

P2 Electronic funds transfer (EFT)

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A payment system using electronic messages instead of paper documents to transfer cash between parties.

P2 Signature card

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A bank record of the signatures of people authorized to sign checks on an account.

P2 Bank reconciliation

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A report explaining any differences between a depositor's book balance and the bank statement balance.

A1 Days' sales uncollected

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A measure of how long it takes to collect receivables, computed from accounts receivable and net sales.