Accounting Ch 8
| Term (memorize) | Definition (memorize) |
|---|---|
| Internal Control | Plan and measures to safeguard assets, encourage employees to follow policy, promote operational efficiency, and ensure accurate and reliable accounting records. |
| Controller | The chief accounting officer of a company |
| Audit | An examination of a company's financial statements and the accounting system. |
| Computer Virus | A malicious program that (a) reproduces, (b) enters program code without consent, and (c) performs destructive actions. |
| Trojan Horse | A malicious program that works like a virus but does not reproduce. |
| Check | Document that instructs a bank to pay the designated person or business a specified amount of money. |
| Bank Statement | Document that a bank uses to report what it did with the depositor's cash. |
| Electronic Funds Transfer (EFT) | System that transfers cash by electronic communication rather than by paper documents. |
| Bank Reconciliation | Document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its bank account. |
| Deposit in Transit | A deposit recorded by the company but not yet by its bank. |
| Outstanding Check | A check issued by the company and recorded on its books but not yet paid by its bank. |
| Bank Collection | Collection of money by the bank on behalf of a depositor. |
| Nonsufficient Funds (NSF) Check | A hot check, one for which the maker's bank account has insufficient money to pay the check. |
| Petty Cash | Fund containing a small amount of cash that is used to pay for minor expenditures. |
| Imprest System | A way to account for petty cash by maintaining a constant balance in the petty cash account, supported by the fund (cash plus payment tickets) totaling the same amount. |
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