CHAPTER 8: Vocabulary Flashcards
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.
bank reconciliation
A summary of all transactions mailed to the depositor or made available online by the bank each month.
bank statement
Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions.
cash
Highly liquid investments that are usually reported with cash on the balance sheet.
cash equivalents
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.
cash short and over account
A requirement by some banks requiring depositors to maintain minimum cash balances in their bank accounts.
compensating balance
The overall attitude of management and employees about the importance of controls.
control environment
A system in which computers rather than paper (money, checks, etc.) are used to effect cash transactions.
electronic funds transfer (EFT)
The control environment, risk assessment, control activities, information and communication, and monitoring.
elements of internal control
The intentional act of deceiving an employer for personal gain.
employee fraud
The policies and procedures used to safeguard assets, ensure accurate business information, and ensure compliance with laws and regulations.
internal controls
A special cash fund to pay relatively small amounts.
petty cash fund
An act passed by Congress to restore public confidence and trust in the financial statements of companies.
Sarbanes-Oxley Act of 2002
A cash fund used for a special business need.
special-purpose fund
A special form for recording relevant data about a liability and the details of its payment.
voucher
