Financial Accounting: Ch 3 Adjusting The Accounts

Internal controls and fraud – -Segregation of duties
-Hire competant personnel
-use control numbers ( checks sale invoice and purchase orders are pre-numbered)
-develop plans and budgets
-Maintain adequate accounting records
-physical and electronic controls (Locked doors, Security cameras)
-conduct internal audits
Owners equity – The difference between assets and liabilities. The amount the business owes to the owner. Also the key amount invested by owners and profit/loss from the operations of the business.
balance sheet: a financial statement that reports assets, liabilities, and owner's equity on a specific date – balance sheet: a financial statement that reports assets, liabilities, and owner's equity on a specific date
reiability principle – each tranaction should be in amounts amounts that can be verified
Book Value of Asset – The difference between the cost of a depreciable asset and its related accumulated depreciation.
the long-term liability decreases when the company repays the money owed – the company is charged interest for using the money
reliable information – trusted by users
Understandable – who is the audience
person with reasonable interest
closing entry – transfers balances in temporary accounts to retained earnings and establishes zero balances in temporary accounts
allowance for doubtful accounts (allowance for bad debts) – a contra account utilized to accumulate totals against accounts recievable
Which one of the following statements is correct concerning the NYSE?
When balancing the cash box, you discover a $30 overage. Prioritize the steps you would use to find or account for this mistake. – • Recount the money
• Check open and closed tickets for money taken in and amount receipted
• Notify the area manager because the amount is over $20
• 0805 overage
Expectation gap – The difference between the role performed by the auditor and the shareholder's expectations
retail sales tax – a tax imposed on tangible personal property sold at retail
Which оne оf the fоllowing stаtements is correct concerning the NYSE?
Bought equipment, paying a down payment with the remainder on account – Equipment- Cash; Account Payable.
Assets and Liabilities.
Equipment and A/p: Increase.
Cash: decreases.
Debit and Credit.
balance Sheet.

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