Accounting test 2: chapters 4, 5, 6

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  1. The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employers resources
    occupational fraud
  2. 3 elements that are present for every fraud that occurs are commonly referred to as:
    • 1. motive
    • 2. rationalization
    • 3. opportunity

    the fraud triangle
  3. This method helps maintain control of cash, a ___________ matches the balance of cash in the bank account with the balance of cash in the company's own records
    bank reconciliation
  4. Differences in a bank statement and a companys books most often occurs because of either __________ or ________
    • timing differences
    • errors
  5. 3 steps in reconciling the bank account
    • 1. adjust the banks cash balance
    • 2. adjust companys cash balance
    • 3. update the companys cash account
  6. Cash receipts of the company that have not been added to the banks record of the companys balance
    deposits outstanding
  7. Checks the company has written that have not been subtracted from the banks record of the companys balance
    checks outstanding
  8. Customers checks written on "non sufficient funds", otherwise known as "bad" checks
    NSF checks
  9. NSF checks will go into which account?
    accounts receiveable
  10. To pay for minor purchases a company will keep a small amount of cash on hand in a __________
    petty cash fund
  11. This account represents the amount of cash owed to a company by its customer from the sale of products or services on account
    accounts receivable
  12. These transactions transfer products and services to a customer today while bearing the risk of collecting payment from that customer in the future.
    credit sales, sales on account, services on account
  13. When does the company record revenue on a credit sale?
    the firm records revenue immediately, as long as future collection from the customer is reasonably certain
  14. Refer to a companys total revenues less any amounts for discounts, returns and allowances
    net revenues
  15. ______ represent a reduction in the listed price of a product or service
    trade discounts
Card Set
Accounting test 2: chapters 4, 5, 6
financial accounting 2401 test 2
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