Chapter 12 Flashcards
bill and hold transactions
transactions in which sales of merchandise are billed to customers prior to delivery with the goods being held by the seller, may overstate revenues and net income if they do not meet specific requirements for recognition of sales
bill of lading
a document issued by a common carrier acknowledging the receipt of goods and setting forth the provisions of the transportation agreement
consignment
a transfer of goods from the owner to another person who acts as the sales agent of the owner
cost accounting standards board
a five-member board established by Congress to narrow the options in cost accounting that are available under GAAP
electronic data interchange
a system in which data are exchanged electronically between the computers of different companies
job time tickets
a document designed to accumulate the labor and machine time devoted to a particular production order
master production schedule
a schedule that is used to plan overall production for a period of time, illustrates the gross production of each of the company’s products
observation
the auditors’ evidence-gathering technique of viewing a client activity to obtain physical evidence of performance
periodic inventory system
a method of accounting in which inventories are determined solely by means of a physical inventory at the end of the accounting period
perpetual inventory system
a method of accounting for inventories in which controlling accounts and subsidiary ledgers are maintained to record receipts and issuances of goods in quantities and dollar amounts
production order
a document that authorizes the production of a specific quantity of a product
purchase commitment
a contractual obligation to purchase goods at fixed prices, entered into well in advance of scheduled delivery dates
sales commitment
a contractual obligation to sell goods at fixed prices, entered into well in advance of scheduled delivery dates
specialists
a person possessing special skill or knowledge in a field other than accounting or auditing such as a real estate appraiser
