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Dr. Carlson's Test
Accounting Information
54
Accounting
Undergraduate 3
04/12/2014

Additional Accounting Flashcards

 


 

Cards

Term
Blind Copy
Definition
Copy of a source document with certain info deleted for internal control purposes. Example: quantity order is omitted on the copy of the purchase order sent to the receiving department
Term
Debit Memo
Definition
Issued by the purchaser to request a decrease in the balance due on account
Term
Paycheck/Paystub
Definition
given to the employee on payday. Strictest internal control needs to be maintained over the payroll function. Paychecks are prepared by payroll and sent to the cash payments department
Term
Payroll Imprest Account
Definition
General ledger account used only for the p[ayment of payroll. The total amount of the payroll is deposited in this account and then the payroll check are written on this account.
Term
Payroll Register
Definition
Lists each employee to be paid including gross pay, employee deductions and net pay. Prepared by the payroll department using employee records maintained by the personnel department. Copy sent to the accounts payable department
Term
Purchase Order (P/O)
Definition
Source document used to request inventory from a vendor. Prepared by the purchasing department based on a purchase requisition received from inventory control. Copies of the purchase order are sent to the vendor, receiving, accounts payable (along with the purchase requisition), and inventory control.
Term
Purchase Requisition
Definition
Source document used to ask purchasing to buy inventroy, supplies, equipment, or other assets. If inventory, the purchase requisition is initiated from inventory control. If a non-inventory item, the request comes from the department needing the asset. Copies are sent to the vendor, purchasing, accounts payable, and perhaps receiving (they also need an approved p/o)
Term
Receiving Report
Definition
Source document prepared by the receiving depart upon receipt of inventory from a vendor. Indicates quantity and type of inventory received. Copies are sent to inventory control, warehouse, purchasing, and accounts payable.
Term
Time Cards
Definition
Source document used to record the number of hours worked by an employee. Time cards are sent to payroll to be used in the preparation of the payroll register.
Term
Valid Vendor File
Definition
File containing a list of vendors from which we may purchase inventory. The list may be segregated by type of inventory. (We may purchase television from one set of vendors but microwaves from another set of vendors.
Term
Vendor's Invoice
Definition
The bill we receive from the vendor outlining the type, quantity, cost, and terms of the transaction.
Term
Voucher/Request for payment (RFP)
Definition
Authorization: initial each step upon completing. 1)record in voucher register 2)file in unpaid vouchers file 3)when paid record in check register
4)file in "paid" file
Term
Accounts Payable
Definition
Acts as the clearing house for all source documents in the expenditures cycle.
Term
Cash Payments
Definition
Responsible for preparing and mailing checks to vendors. Checks are ONLY prepared based on vouchers received from the accounts payable department.
Term
general ledger
Definition
Responsible for maintaining all general ledger control accounts. Also responsible for reconciling summary subsidiary ledger reports received by each department with the balance in the control account
Term
Inventory Control
Definition
Responsible for maintaining inventory subsidiary ledger/records. Also responsible for preparing purchase requisitions based on minimum stock levels established for each inventory item
Term
Payroll
Definition
Responsible for maintaining the payroll register. Send Payroll register to accounts payable.
Term
Purchasing
Definition
Responsible for preparing purchase orders based on purchase requisitions and valid vendor files. Copies are sent to the vendor, receiving, accounts payable, and inventory control.
Term
Receiving
Definition
Responsible for receiving inventory shipped from the vendor. Reconciles inventory received with blind copy of the purchase order.
Term
Bill of Lading
Definition
Agreement between the seller and the shipper to transport merchandise to the customer. A legal document that states who owns the merchandise (FOB shipping pt vs destination) and gives the shipping company permission to have possession of the merchandise. The original is given to the shipping carrier and a copy is filed in the shipping department
Term
Cash pre-list
Definition
A source document listing all check received from customers. The original is sent to the cash receipts department and copies are sent to accounts receivable and the treasurer.
Term
Closed File
Definition
A file containing source document related to transactions that have been completed.
Term
Credit Memo
Definition
Source document authorizing a credit to a customer's account for any of a variety of reasons: damaged merch, merch returns, mistake in recording transaction etc.
Term
Journal Voucher
Definition
Authorizes an entry to be made into the general ledger. A form on internal control that eliminates the need for a formal general journal.
Term
Open File
Definition
A file containing source documents related to a transaction that has not yet been completed. For example, inventory may been order and received but not yet paid.
Term
Packing Slip
Definition
The copy of the sales invoice that is sent to the customer along with the merchandise
Term
Remittance advice
Definition
Source document verifying which invoice the customer intends to pay. There are three potential sources of a remittance advice: 1)part of the invoice sent to the customer 2)originated by the customer 3)may be prepared by the mail clerk. It is also sent to accounts receivable where it is compared tot eh copy of the sales invoice on file with any credit memo.
Term
Sales Slip/Sales Order
Definition
What we call the customer's purchase order. Communicates the customer's intent to order merchandise
Term
Sales Invoice
Definition
Customer's copy of sales order that shows items and quantity shipped, unit prices, shipping charges and total amount owed by the customer. Copies of the sales invoice are sent to various departments to be used as either authorization and/or verification for the rest of the transaction cycle. (Customer, 2 to receivable/billing, sales department, warehouse, shipping. Used to reconcile different documents in each department)
Term
Shipping notice
Definition
created as a copy of the sales invoice in the sales department. The shipping notice is completed in the shipping department and sent to the billing department as notice the merchandise has been shipped to the customer
Term
Stock Release/picking ticket
Definition
created as a copy of the sales invoice in the sales department. The stock release/picking ticket acts as permission for the warehouse to send the merchandise to the shipping department.
Term
Accounts Receivable
Definition
Responsible for updating and maintaining the customer subsidiary ledger. At periodic intervals sends batch total to the general ledger department for reconciliation with the accounts receivable control account
Term
Billing
Definition
May or not be part of the A/R department. If part of A/R, the following functions are considered part of the accounts receivable department's responsibilities. Receiving multiple copies of the sales invoice from teh sales department. Responsible for sending to the customer the billing copy of the sales invoice. DO NOT bill the customer until the shipping notice is received from shipping.
Term
Cash Receipts
Definition
Responsible for maintaining the cash receipts journal, preparing the deposit slip and depositing the checks.
Term
Credit
Definition
Authorizes the sales order process by approving a customer's credit when the sales department forwards the sales order. New customers should undergo a detailed external verification of creditworthiness.
Term
Inventory Control
Definition
Responsible for maintaining the inventroy subsidiary ledger. Updates the ledger using receiving reports and shipping notices. Responsible for initiating purchase requisitions (expenditure cycle) which are sent to the purchasing department (expenditure cycle).
Term
General ledger
Definition
responsible for maintaining the general ledger control accounts. Receives batch total reports from accounts receivable/billing, inventory, accounts payable, fixed assets, etc...Responsible for reconciling control accounts with the individual subsidiary ledgers.
Term
Mail Room
Definition
Responsible for receiving the customer's check along with the remittance advice. Upon opening the mail a cash prelist is immediately prepared and the checks are endorsed "For Deposit Only" A copy of the prelist is sent to the cash receipts department. The remittance advice along with another copy of the cash prelist are sent to the accounts receivable department.
Term
Sales
Definition
Receive customer orders, creating sales order and sales invoices. Information recorded includes, name and addresss of customer, type quantity and price of inventory item to be sold as well as terms of sale, including taxes and freight charges.
For internal control purposes sales invoices are not created until customer credit has been cerified and approved by the credit department. Sales orders/invoices are put in an open order file in alphabetical order. See sales invoice for info regarding how copies of the sales invoice are distributed.
Term
Shipping
Definition
Responsible for loading the merchandise onto the shipping carrier. Authorization for shipping the merchandise comes from the stock release and shipping notice sent form teh sales department. When the merchandise and copy of the stock release are received from teh warehouse, all three source documents (packing slip, shipping notice, and stock release) are verified with the merchandise. Once the shipping clerk is satisfied there are no erros, the merchandise is packaged with the packing slip, the shipping notice is completed, ad a bill of lading is prepared.
Term
Warehouse
Definition
Responsible for physical custody of the merchandise. Authorization for the release of merchandise comes from the stock release/picking ticket sent from the sales department. The merchandise is forwarded to the shipping department along with a copy of the stock release. If any item is out of stock the back order of merchandise is recorded on the stock release. After the merchandise is transferred to the warehouse, the following functions need to be performer. 1)File a copy of the stock release 2)record the release of merchandise in the warehouse's informal inventory record.
Term
Decision Makers
Definition
Individuals who use accounting information to make decisions concerning past, present, or future business activities
Term
understandability
Definition
communication information in such a manner that a decision maker can comprehend the meaning of the information
Term
Decision usefulness
Definition
information that is cost beneficial to the decision making process
Term
Relevance
Definition
Information that pertains directly to, and has an impact on, a decision. Information that is capable of making a difference in the ultimate decision
Term
Timeliness
Definition
Information that is provided to the user before a decision has to be made and in time to actually affect the decision
Term
Predictive Value
Definition
Information that can be used to estimate what may happen in the future
Term
Feedback Value
Definition
Information that provides confirmation
Term
Representational Faithfulness
Definition
Information that accurately measures an event.
Term
Neutrality
Definition
Information that is not biased, but instead objectively represents an event
Term
Verifiability
Definition
Information that be confirmed by a third party
Term
Comparability
Definition
Information that can be contrasted with similar information from a different source
Term
Consistency
Definition
Information that is measured and presented in a constant manner across time periods.
Term
Materialtiy
Definition
Information that will have a signifcant impact on a decision.
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