Term
| establishment of responsiblitiy |
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Definition
| one person is responsible for a given task |
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Term
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Definition
1. different individuals are respo sible for related activities
2. responsibility for record keeping for an asset should be seperate from the physical custody of that asset |
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Term
| segregation of related activities |
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Definition
making one individual responisble for related activites increases the potential for errors and irregularities
example: purchasing activities or sales activities |
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Term
| segregation of record keeping from physical custody |
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Definition
| maintaining cash bal per books v maintaing physical custody of cash |
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Term
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Definition
forward sounce of documents for accounting entries to the accounting department
ex: prenumbered documents |
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Term
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Definition
| safeguarding of assets to enhance the accuracy and reliability of the accounting records |
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Term
| independent internal verification |
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Definition
1. companies should verify records periodically or on a surprise basis
2. an employee who is independedt of the personnel resonsible for the informations should make the verification
3. discrepencies and exceptions should be reported to a management level that can appropriate corrective action |
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Term
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Definition
1.bond employees who handle cash
2. rotate employees duties and require employees to take vacations
3. conduct thorough background checks |
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Term
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Definition
| once it SHIPS the ownership is transfered to the buyer |
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Term
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Definition
| Once it is recieved and ACCEPTED the ownership is transfered |
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Term
| Specific Identification method |
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Definition
| each item is unique and the cost associated with it be added together to get value of total inventory |
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Term
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Definition
First in First out
parallels to actual physical flow of goods
COGS Lower
END INV higher
NET INCOME highest |
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Term
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Definition
Last in first out
COGS higher
END INV lower
NET INCOME lowest
will pay less in taxes if costs are rising |
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Term
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Definition
| values inventory at a weighted cost |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
| which method of inventory costing is prohibited under IFRS |
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Definition
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Term
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Definition
| requires all publicly traded US corporations to maintain an adequate system of internal controls |
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Term
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Definition
| begin cash + deposits in transit - outstanding checks |
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Term
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Definition
| begin bal + notes - NSF Chekcs - service charges +/- errors |
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Term
| 5 basic principles of cash management |
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Definition
1. increase
2. keep
3. monitor
4. plan
5. invest |
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Term
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Definition
| beg + receipts - dispbursments + borrow |
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Term
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Definition
ONLY EFFECTS BAL SHEET
dr ADA cr Accts rec |
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Term
| Allowance for doubtful accounts |
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Definition
Contra Asset
shown on bal sheet |
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Term
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Definition
Reported with operating expense
decreases assets decreases equity decreases net income increases expenses |
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Term
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Definition
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Term
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Definition
| sales - returns - discounts |
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Term
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Definition
| (beg acct rec + end acct rec) / 2 |
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Term
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Definition
| 365 / recievables turnover |
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Term
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Definition
| all expenditures necessary to aquire and make ready for intended use |
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Term
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Definition
alls things the are required in assembling, installing, and testing the unit
purchase price + sales tax + painting and lettering |
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Term
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Definition
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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
| (beg assest + end assets) /2 |
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Term
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Definition
| net sales / avg total assets |
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Term
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Definition
- how to find depreciations of intangible
- dr amorization expense cr asset on acct
-straight line |
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Term
| research and development costs |
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Definition
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Term
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Definition
- give owner exclusive right to rerpoduce or sell
- granted for life of creator + 70 years
- Capitalize costs of aquiring and defending it
- Amortized to expense over useful life |
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Term
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Definition
- ex coca-cola
- 20 year renewal periods
- capitalize acuisition cost
- no amortization |
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Term
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Definition
- ex toyota
- amortizied to expense over the life of the franchise
- indefinite life: carried at cost & not amortized |
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Term
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Definition
| - ex: restaurant with everything inside |
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Term
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Definition
| shown as PPE and are intagibles are shown in a different category |
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Term
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Definition
| comapny does not own them, belongs to origional owner |
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