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FABM 2 > Finals > Flashcards

Finals Flashcards

1
Q

the company will compare their own financial statements for the current period with their financial statements from the prior period.

A

Horizontal Analysis

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2
Q

serves as the basis or the starting point of the comparison.

A

Prior Period Amount

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3
Q

Measured in percentages

A

Increases or Decreases

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4
Q

Formula for Horizontal Analysis

A

% = (Amount in Current Year - Amount in Previous Year) ÷ Amount in Previous Year x 100

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5
Q

companies express items of a certain financial statement as a percentage of a given base amount.

A

Vertical Analysis

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6
Q

normally compared to the Net Sales for that given accounting period.

A

Items in an Income Statement

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7
Q

normally compared to the total assets of the company for that given year.

A

items in a Balance Sheet

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8
Q

Formula for Vertical Analysis (Balance Sheet)

A

% = Items in Balance Sheet ÷Total Assets x 100

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9
Q

Formula for Vertical Analysis (Income Statement)

A

% = Items in Income Statement ÷Net Sales x 100

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10
Q

is a form supplied by a bank for a depositor to fill out, designed to document in categories the items included in the deposit transaction.

A

Bank Deposit Slip

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11
Q

a sum of money placed or kept in a bank account, usually to gain interest.

A

Deposit

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12
Q

A bank deposit slip contains:

A
  1. the date of the deposit
  2. the name of the depositor
  3. the depositor’s account number
  4. the amounts being deposited as well as break down of whether the deposit is comprised of checks, cash, or if the depositor wants a specific amount of cash back from a check deposit
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13
Q

The complete name of the depositor that is reflected in the records of the bank.

A

Account Name

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14
Q

An account number is a unique string of numbers and, sometimes, letters and other characters that identifies the owner of an account and grants access to it.

A

Account Number

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15
Q

This is where you enter the amount of paper or coin currency you are depositing.

A

Cash Field

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16
Q

In this section, you will have several rows. This allows you to deposit several different checks at one time.

A

Check Section

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17
Q

What to do if you are only depositing one check?

A

draw a line through the remaining rows.

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18
Q

Banks usually allow you to get some cash on the spot when you make a deposit so you can take care of immediate expenses.

A

Cash Back

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19
Q

You enter the amount of cash you would like
to receive back in this field

A

Less Cash

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20
Q

If you are not requesting cash back from the
deposit, do you need to include a signature when signing the deposit slip?

A

No.

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21
Q

In this field, write the total
amount of your deposit.

A

Total Field

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22
Q

What should the total include? (Deposit)

A

the sum of your bills, coins and checks, minus the
cash back amount that is listed in the previous step.

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23
Q

is a written order to your bank
instructing it to withdraw
funds from your account.

A

A bank withdrawal slip

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24
Q

involves removing funds from a bank
account.

A

WITHDRAWAL

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25
Q

A bank withdrawal slip contains:

A
  1. the depositor’s account number
  2. the date of the withdrawal
  3. the name of the depositor
  4. the signature of the depositor
  5. the total amount to be withdrawn
26
Q

is the most important part in the withdrawal slip since this is the proof that the depositor is authorizing the bank to get money from his account.

A

Signature

27
Q

The amount that the depositor wishes to withdraw from his account.

A

Amount to be Withdrawn

28
Q

The amounts in words and in figures are indicated.

A

Amount to be Withdrawn

29
Q

is a written, dated, and signed instrument that
directs a bank to pay a specific sum of money to
the bearer.

A

check

30
Q

the person or entity writing the check.

A

Payor/Drawer

31
Q

the person to whom the check is written.

A

Payee

32
Q

is the bank on which the check is drawn.

A

Drawee

33
Q

The following are the steps in preparing a check:

A
  1. Date the check
  2. Write the name of the PAYEE
  3. Write the payment amount in numbers
  4. Write the payment amount in words
  5. Write a memo
  6. Sign the check
34
Q

Step 1 in preparing the check

A

Date the check - Write the date on the line at the top
right-hand corner.

35
Q

This step is important so the bank and/or person you are giving the check knows when you wrote it.

A

Step 1: Date the check

36
Q

Step 2 in preparing the check

A

Who is this check for? The next line on the check, “Pay to the order of,” is where you write the name of
the person or company you want to pay
(payee).

37
Q

What to do if you don’t know the person or organization’s exact name?

A

just write the word “cash”

38
Q

Step 3 in preparing the check

A

Write the payment amount in numbers -Be sure to write this clearly so the bank can accurately subtract this amount from your account.

39
Q

where and how will you write the amount you are paying?

A

the two spots on a check. First, you’ll need to write the dollar amount numerically (for example
$130.45) in the small box on the right.

40
Q

Step 4 in preparing the check

A

Write the payment amount in words - Writing the amount in words is important for a bank to process a check as it confirms the correct payment total.

41
Q

Step 5 in preparing the check

A

Write a memo - Filling out the line that says “Memo” is optional, but helpful for knowing why
you wrote the check.

42
Q

Step 6 in preparing the check

A

Sign the check - This shows the bank that you
agree that you are paying the stated amount and to the correct payee.

43
Q

how to sign the check?

A

Sign your name on the line at the bottom right-hand corner using the signature you used when you opened the checking account.

44
Q

is a document that is typically sent by the bank to the
account holder every month, summarizing all the
transactions of an account during the month.

A

Bank Statement

45
Q

also known as an account statement

A

Bank Statement

46
Q

The statement includes:

A

Deposits
Withdrawals
Charges
Beginning and Ending balance for the period

47
Q

a sum of money placed or kept in a bank account, usually to gain interest (credit).

A

Deposits

48
Q

funds removed from a bank account (debit).

A

Withdrawals

49
Q

covers all fees made by a bank to their customers.

A

Charges

50
Q

These charges may take many forms, including:

A
  • monthly charges for the provision of an account
  • charges for specific transactions
  • interest in respect of overdrafts
  • charges for exceeding authorized overdraft limits,
  • making payments where no authorized overdraft exists
51
Q

Consists of the initial deposit or carried value from the previous month’s ending balance

A

BEGINNING BALANCE

52
Q

The remaining balance during the end of the period.

A

ENDING BALANCE

53
Q

This is being done to show that there is no discrepancy between the cash balance per book records and the cash balance per bank records.

A

Bank Reconciliation

54
Q

Cash in Bank = ?

A

Deposits

55
Q

One of the internal control features in every company.

A

Bank reconciliation

56
Q

a discrepancy in the ending balance of the two accounts.

A

deposit in transit

57
Q

deposits that were made after the bank statement was issued but have been recorded on the books.

A

deposit in transit

58
Q

is an amount that has been deducted by the book, but has not yet been deducted by the bank as of the cut-off date.

A

Outstanding check

59
Q

are items that was already added by the bank, but have not yet been added by the book as of the cut-off date.

A

Credit Memo

60
Q

Other credit memos include:

A
  • accounts receivable collected by the bank in favor of the company
  • loan proceeds directly credited by the bank to the account of the customer.
61
Q

items that were deducted by the bank but have not yet been deducted per book.

A

Debit Memo

62
Q

Debit memos include:

A
  • bank service charges
  • customer NSF checks returned by the bank.

FABM 2 (3 decks)

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