Chapter 12

Question 1

administrative processes

Answer 1

transactions and activities that either are specifically authorized by top managers or are used by managers to perform administrative functions

Question 2

capital

Answer 2

the funds used to acquire the long term, capital assets of an organization

Question 3

source of capital processes

Answer 3

processes to authorize the raising of capital, the execution of raising the capital, and the proper accounting of that capital

Question 4

underwriter

Answer 4

a third party that contracts with a corporation to bring a new issue of securities to the public market

Question 5

investment processes

Answer 5

those processes which authorize, execute, manage, and properly account for investments of excess funds

Question 6

special journals

Answer 6

journals that are established to record specific types of transactions

Question 7

subsidiary ledgers

Answer 7

maintain the detail information regarding routine transactions with an account established for each activity

Question 8

journal voucher

Answer 8

used to change accounts in the general ledger, it has to be approved

Question 9

control activities

Answer 9

authorization 
segregation of duties
adequate records and documents
safeguarding of assets
independent checks and reconciliations

Question 10

four general purpose financial statements

Answer 10

balance sheet, income statement, statement of cash flows, and statement of retained earnings

Question 11

four primary functions of corporate governance

Answer 11

management oversight, internal controls and compliance, financial stewardship, and ethical conduct