a documented approach to protecting an organization’s assets
internal control
a law passed to help protect investors from fraudulent financial reporting by corporations
Sarbanes-Oxley Act
Based on the Sarbanes-Oxley Act, Section 404, where should companies report information about the independent audit and internal controls?
annual report
seller of goods and services
vendor
Verification, as it relates to internal controls, must occur _____.
periodically and randomly
The Sarbanes-Oxley Act, Section 404 requires ______ companies to obtain an independent audit and report internal controls in their annual report.
publicly traded
Proper internal control procedures require at least ____ signature(s) on company checks.
two
an analysis between the bank statement and the company's cash transactions
bank reconciliation
a list of monthly account transactions
bank statements
the electronic transfer of money between bank accounts or financial institutions
electronic funds transfer
a bank charge for not having enough money in the bank when a transaction is presented to the account
overdraft fee
If the president of ABC Corporation was scheduled for a business trip, which form of payment would be best to use for travel?
company debit card
a small amount of cash kept on hand to pay for small, non-recurring purchases
petty cash
a loan that requires fixed payments and has an interest rate
installment credit
credit that is automatically renewed as debts are paid
revolving credit
to turn assets into cash (liquid)
liquidate
90 days same as cash is an example of _____. (a loan that, if repaid by a set date, has no interest)
non-installment credit
the cost of transporting goods
freight
a bill given by a vendor to the purchasing entity
invoice
a written document of the items to purchase and their prices
purchase order
a request to make a purchase
purchasing requisition
discounts and payment due dates
credit terms
the acronym when the buyer pays freight costs
FOB origin
the acronym when the seller pays freight costs
FOB delivered
The purchase requisition _____ the purchasing process.
starts
If a vendor offers a discount if the account is paid in full within 15 days, how would the credit terms be shown on the invoice?
4/15
document is sent to the vendor to purchase items
purchase order
a schedule showing vendors owed, the dollar amount, and the length of time the debt is outstanding
accounts payable aging schedule
a schedule showing all vendors, the dollar amount owed, and account balances
schedule of accounts payable
Organizations should always try to ____ freight and credit terms.
negotiate
assets > liabilities
liquidity
Accounts payable are considered _____ on the balance sheet.
liabilities