Chapter 1-3, 15 & 16 Flashcards
SOD Recording
Create/enter transactions; edit transactions before approval
SOD Authorization
Create/edit master data, perform reconciliations, approve transactions
SOD Custody
Maintain physical custody of assets (cash and inventory)
Batch vs. Real Time Processing
Batch: Transactions are kept in a temporary file then uploaded together in a batch at a scheduled time.
Real-Time: When transactions are entered they instantly update the permanent place of record
Sequence codes
Data is numbered consecutively (check numbers in order)
Block/Group codes
Data is grouped by number prefixes (COA Assets=1 Liabilities=2)
Mnemonic Codes
Data is organized with both letters and numbers
ERP’s
Expensive, but can integrate all of a companies data into one place.
Accrual vs Deferral
Accrual: Cash later
Deferral: Cash now
XBRL
Extensive Business Reporting Language, tags each item.
SEC requires that XBRL data is filed quarterly and annually
Where are adjusting Journal Entries saved?
General Journal
Controller Job
Begins the Closing process, closes the books
6 Ongoing Process Controls
1) Validity check
2) Field or Format check
3) Zero-balance check
4) Completeness check
5) Sign check
6) Limit check
Validity check
Checks that data exists elsewhere in the master data
Field/Format check
Checks that data is in the proper format (zip code must be numbers)
Zero-balance check
Verifies that the transaction zeros out
Completeness check
Ensures that all data is entered before proceeding
Sign check
Requires that data is appropriately positive or negative
Limit check
Won’t allow the transaction to proceed a certain dollar threshold
How frequently should data be backed up?
Daily
Data flow diagram
Shows processes of an entire department
Document Flowchart
Shows the flow of documents within a department
Systems Flowchart
Shows inputs/outputs of computer systems
Program flowchart
Logic for software to follow (If yes than xx; if no then yy)
Payroll Register
Summarizes the payroll JE’s by employee
Withholding’s (payroll)
Employee portion of taxes or insurance
Imprest account for payroll
Bank account where the exact payroll amount is deposited before checks are disbursed.
HR Department Responsibilities
Hiring/Firing/Promoting and controls employee master data
Payroll Department Responsibilities
Executes payroll, reviews tax transactions
AP Department Responsibilities
Approves payroll for payment, pay for inventory, supplies and services.
Cashier Responsibilities
Print and mail payroll checks
Which document triggers the JE
Wage Expense
Withholding
Wages Payable
Payroll Register
