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Bank Reconciliation
The process of bringing the book and bank balances into agreement.
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Bank Statement
A statement of account issued by a bank to each depositor once a month
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Canceled Checks
The depositor's checks paid by the bank during that period.
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Cash Short and Over
- Keep up with the day to day shortages and overages.
- Short-> Dr. Short&Over; Cr. Cash
- Overages-> Dr. Cash: Cr. Short & Over
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Combination Journal
A journal with such special and general columns
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Deposits in Transit
Deposits that have not reached or been recorded by the bank before the statement is prepared
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Deposit Ticket
A form showing a detailed listing of items being deposited
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Drawee
The bank on which the check is drawn
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Drawer
The depositor who orders the bank to pay cash
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Employee Earnings Record
A separate record of each employee's earnings
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FUTA ( Federal Unemployment Tax Act)
Levied only on employers. It's purpose is to increase funds for federal and state unemployment
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Independent Contractor
Performs a service for a fee and does not work under the control and direction of a company paying for the service
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NSF checks
(Not Sufficient Funds) Checks deposited by the depositor that are not paid because the drawer did not have sufficient funds
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Outstanding Checks
Checks issued that have not been presented to the bank for payment before the statement is prepared.
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Payee
The person being paid the cash
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Payroll Register
A form used to assemble the data required at the end of each payroll period
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Petty Cash Fund
A fund of currency and coins established for payment of small amounts of money
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Petty Cash for Payment Records
A special multi-column record that supplements the regular accounting records
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Petty Cash Voucher
A form used to reflect payments from the petty cash fund
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Salary
Compensation for managerial or administrative services
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Wages
Compensation for skilled or unskilled labor
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Wages Expense
An account that is debited for the total amount of the gross earnings of all employees for each pay period
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Worker's Compensation Insurance
Provides Insurance for employees who suffer job related injuries
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What does FICA stand for?
Federal Insurance Contributions Act
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What is considered cash in accounting?
Coins, currency, paper money, checks, credit card receipts and money orders received form others as well as money deposited in bank
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Rates and Maximums for SS, Medicare, FUTA, and SUTA
- SS-> 6.2% not over 94,200/year
- Medicare-> 1.45%
- FUTA-> 0.8% max $7,000
- SUTA-> 5.4% max $7,000
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Formula for Paychecks
- ___________ *12 months
- ___________/ 52 weeks
- _________/ 40 hours
- ______* Overtime rate
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