Chapter 7 Vocabulary Flashcards
bank reconciliation
The analysis that details the items responsible for the difference between the cash balance reported in the bank statement and the balance of the cash account in the ledger.
account form
A summary of all transactions mailed to the depositor or made available online by the bank each month.
cash
Coins; currency (paper money); checks; money orders; and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions.
cash equivalents
Highly liquid investments that are usually reported with cash on the balance sheet.
cash short and over account
An account which has recorded errors in cash sales or errors in making change causing the amount of actual cash on hand to differ from the beginning amount of cash plus the cash sales for the day.
compensating balance
A requirement by some banks requiring depositors to maintain minimum cash balances in their bank accounts.
control environment
The overall attitude of management and employees about the importance of controls.
electronic funds transfer (EFT)
A system in which computers rather than paper (money; checks; etc.) are used to effect cash transactions.
elements of internal control
The control environment; risk assessment; control activities; information and communication; and monitoring.
employee fraud
The intentional act of deceiving an employer for personal gain.
internal control
Money received for interest.
petty cash fund
A special cash fund to pay relatively small amounts.
ratio of cash to monthly cash expenses
Ratio that helps assess how long a company can continue to operate without additional financing or generating positive cash flows from operations.
Sarbanes-Oxley Act
The relative distribution of sales among the various products available for sale.
special-purpose funds
Cash funds used for a special business need.
