Accounting 1: Chapter 8

  1. Bank Reconciliation
    the process of comparing the bank's balance of an account with the company's balance and explaining any differences to make them agree
  2. Bank Service Charge
    a fee charged by a bank for use of it's services
  3. Bank Statement
    a monthly statement from the bank that shows the depositor's bank transactions and balances
  4. Bonding
    obtaining insurance protection against misapproriation of assets by employees
  5. Cash
    resources that consist of coins, currency, checks, money orders, and money on hand or on deposit in a bank or similar depository
  6. Cash Equivalents
    short-term, highly liquid investments that can be converted to a specific amount of cash
  7. Check
    a written order signed by a bank depositor, directing the bank to pay a specified sum of money to a designated recipient
  8. Compensating Balances
    minimum cash balances required by a bank in support of bank loans
  9. Deposits in transit
    deposits recorded by the depositor but not yet been recorded by the bank
  10. Electronic Funds Transfer (EFT)
    a disbursement system that uses wire, telephone, or computers to transfer funds from one location to another
  11. Internal Auditors
    company employees who continuously evaluate the effectiveless of the company's internal control system
  12. Internal Control
    all of the related methods and measures adopted within an organization to safeguard it's assets and enchance the accuracy and reliability of it's accounting records
  13. NSF Check
    a check that is not paid by a bank because of insufficient funds in a customer's bank account
  14. Outstanding Checks
    checks issued and recorded by a company but not yet paid by the bank
  15. Petty Cash Fund
    a cash fund used to pay relatively small amounts
  16. Restricted Cash
    cash that must be used for a special purpose
  17. Sarbanes-Oxley Act
    regulations passed by Congress in 2002 to try to reduce unethical corporate behavior
  18. Voucher
    an authorization form prepared for each payment in a voucher system
  19. Voucher System
    a network of approvals by authorized individuals acting independently to ensure that all disbursements by check are proper
Card Set
Accounting 1: Chapter 8
Accounting 1: Chapter 8