Term
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Definition
| The process of comparing the bank's account balance with the company's balance, and explaining the differences to make them agree |
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Definition
| a statment recieved monthly from the bank that shows the depositor's bank transactions and balances |
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Definition
| Obtaining insurance protection against theft by employees |
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Term
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Definition
| resources that consist of coins, currency , checks, money orders, and money on hand or on deposit in a bank or similar depository |
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Definition
| a projection of anticipated cash flows, usually over a one- to two-year period |
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Term
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Definition
| Short term, highly liquid investments that can be readily converted to a specific amount of cash |
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Definition
| Deposits recorded by the depositor that hae not been recorded by the bank |
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Term
| Electronic Funds Transfer |
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Definition
| A disbursement system that uses wire, telephone, or computer to transfer cash from one location to another |
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Term
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Definition
| A dishonest act by an employee that results in personal benefit to the employee at a cost to the employer |
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Term
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Definition
| the three factors that contribute to fraudulent activity by employees: opportunity, financial pressure, and rationalization |
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Term
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Definition
| company employees who continuously evaluate the effectiveness of the company's internal control systems |
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Term
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Definition
| All the related methods and measures adopted within an organization to safeguard its assets and enhance the reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations |
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Definition
| a check that is not paid by a bank because of insufficient funds in a bank account |
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Term
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Definition
| checks issued and recorded by a company that have not been paid by the bank |
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Term
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Definition
| a cash fund used to pay relatively small amounts |
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Term
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Definition
| cash that is not available for general use but instead is restricted for a particular purpose |
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Term
| Sarbanes-Oxley Act of 2002 (SOX) |
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Definition
| Law that requires companies to maintain adequate systems of internal control |
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Term
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Definition
| employee responsible for the management of a company's cash |
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Term
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Definition
| an authorization form prepared for each expenditure in a voucher system |
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Term
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Definition
| A network of approvals by authorized individuals, acting independently, to ensure that all disbursements by check are proper |
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Term
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Definition
| amounts customers owe on account |
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Term
| Aging the accounts receivable |
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Definition
| a schedule of customer balances classified by the length of time they have been unpaid |
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Term
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Definition
| a method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period |
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Term
| Average collection period |
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Definition
| the average amount of time that a receivable is outstanding, calculated by dividing 365 days by the receivables turnover ratio |
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Term
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Definition
| An expense account to record losses from extending credit |
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Term
| Cash (net) realizable value |
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Definition
| The net amount a company expects to receive in cash from receivables |
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Term
| Concentration of credit risk |
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Definition
| the threat of nonpayment from a single large customer or class of customers that could adversely affect the financial health of the company |
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Term
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Definition
| a method of accounting for bad debts that involves charging receivable balances to bad debts expense at the time receivables from a particular company are determined to be uncollectible |
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Term
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Definition
| a note that is not paid in full at maturity |
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Term
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Definition
| a finance company or bank that buys receivables from businesses for a fee and then collects the payments directly from customers |
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Term
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Definition
| the party in a promissory note who is making the promise to pay |
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Term
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Definition
| claims for which formal instruments of credit are issued as evidence of the debt |
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Term
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Definition
| the party to whom payment of a promissory note is to be made |
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Term
| Percentage of receivables basis |
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Definition
| a method of estimating the amount of bad debts expense whereby management establishes a percentage relationship between the amount of receivables and the expected losses from uncollectible accounts |
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Term
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Definition
| a written promise to pay a specified amount of money on demand or at a definite time |
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Term
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Definition
| amounts due from individuals and companies that are expected to be collected in cash |
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Term
| Receivables turnover ratio |
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Definition
| a measure of the liquidity of receivables, computed by dividing net credit sales by average net accounts receivables |
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Term
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Definition
| notes and accounts receivable that result from sales transactions |
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Term
| Accelerated depreciation method |
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Definition
| a depreciation mehod that produces higher depreciation expense in the early years than the straight line approach |
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Term
| additions and improvements |
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Definition
| costs incurred to increase the operating efficiency, productive capacity, or expected useful ife of a plant asset |
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Term
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Definition
| the process of allocating to expense the cost of an intangible asset |
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Term
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Definition
| indicates how efficiently a company uses its assets to generate sales; calculated as net sales divided by average total assets |
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Term
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Definition
| expenditures that increase the company's investment in plant assets |
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Term
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Definition
| a contractual agreement allowing one party (the lessee) to use another party's asset (the lessor); accounted for like a debt financed purchase by the lessee |
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Term
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Definition
| an amount equal to the fair value of the asset given up or the fair value of the asset given up or the fair value of the asset received, whichever is more clearly determinable |
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Term
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Definition
| an exclusive right granted by the federal government allowing the owner to reproduce and sell an artistic or published work |
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Term
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Definition
| a depreciation method that applies a constant rate to the declining book value of the asset and produces a decreasing annual depreciation expense over the asset's useful life |
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Term
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Definition
| the cost of a plant asset less its salvage value |
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Term
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Definition
| the process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner |
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Term
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Definition
| a contractual arrangement under which the franchisor grants the franchisee the right to sell certain products, to provide specific services, or to use certain trademarks or trade names, usually within a designated geographic area |
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Term
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Definition
| the value of all favorable attributes that relate to a company that are not attributable to any other specific asset |
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Term
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Definition
| a permanent decline in the fair value of an asset (brain on alcohol) lol |
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Term
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Definition
| rights, priviledges, and competitive advantages that result from the ownership of longlived assets that do not possess physical substance |
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Term
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Definition
| a party that has made contractual arragements to use another party's asset for a period at an agreed price |
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Term
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Definition
| a party that has agreed contractually to let another party use its asset for a period at an agreed price |
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Term
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Definition
| operating rights to use public property, granted by a governmental agency to a business |
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Term
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Definition
| a contractual agreement allowing one party (the lessee) to use the asset of another party (the lessor); accounted for as a rental by the lessee |
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Term
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Definition
| expenditures to maintain the operating efficiency and expected productive life of the asset |
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Term
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Definition
| an exclusive right issued by the U.S. Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of 20 years from the date of the grant |
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Term
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Definition
| Tangible resources that have physical substance, are used in operations of the business, and are not intended for sale to customers |
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Term
| research and development costs |
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Definition
| expenditures that may lead to patents, copyrights, new processes, and new products; must be expensed as incurred |
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Term
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Definition
| a profitability measure that indicates the amount of net income generated by each dollar of assets; computed as net income divided by average assets |
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Term
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Definition
| expenditures that are immediately charged against revenues as an expense |
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Term
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Definition
| a method in which companies expense an equal amount of depreciation for each year of the assets useful life |
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Term
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Definition
| a word, phrase, jingle, or symbol that distinguishes or identifies a particular enterprise or product |
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Term
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Definition
| a depreciation method inwhich useful ife is expressed in terms of the total units of production or use expectied from the asset |
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Term
Depreciation expense
(formula) |
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Definition
book value at the beginning of the year
x
Declining balance rate |
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Term
return on assets
(formula) |
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Definition
Profit margin
x
Asset turnover |
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Term
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Definition
| Net Sales/Average total assets |
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Term
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Definition
| Net income/average total assets |
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