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Definitions |
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aden/o
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gland
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Accounting Equation
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Assets=Liabilities+Owners Equity
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Record Keeping
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(bookkeeping)
recording of transactions and events, either manually or electronically
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Contribution Margin Ratio
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Total Contribution Margin
Sales
OR
(Price-Unit Variable Cost)
Price
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The stockholders' owernership interest in the assets of a corporation
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Stockholders' equity
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Asset
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anything of value that is owned
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Governance
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The combination of processes and structures implemented by the board to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives.
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Database Administrator
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The person reasponsible for coodinating, controlling, and managing the data in the database.
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Available
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collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period
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Payroll
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the total amount earned by all employees for a pay period
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Six Sigma
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A process improvement method that relies on customer feedback and fact-based data gathering and analysis to drive process improvement.
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Quality-Assurance
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The process of assuring that an internal audit function operates according to a set of standards defining the specific element that must be present to ensure that the findings of the internal audit function are legitimate.
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Accrued Liability
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Expense incurred before cash is paidWages Payable
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The branch of accounting concerned with providing management with information to facilitate planning and control.
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Management Accounting
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Digital Signature
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: this technology validates the identity of the sender of an electronic message to reduce the risk that a communication was sent by an unauthorized system or user or was intercepted/modified in transit.
*Detects messages that have been altered in transit, thus preventing input of inaccurate data.
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Differential Revenue
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The difference in revenue between two alternatives.
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net purchases
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all the costs related to merchandise purchased during the period
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Enterprise System
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A software system that integrates data from across an organization into a single cenrtalized database that enables all employees to access a common set of data.
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Residual Risk
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The portion of inherent risk that remains after management expects its risk responses (sometimes referred to as net risk)
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financial statements are...
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the business documents that companies use to report their results of financial activities to various groups
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Matching Principle
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prescribes that a company must record its expenses incurred to generate the revenue reported
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What are the two methods for estimating cash flows? What is the most common method?
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Direct, Indirect.
INDIRECT.
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planning variance
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the difference between the planned and flexible budget amount for a singly item
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Perpetual inventory accounting system
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every transaction involving an inflow and outflow of inventory is recorded as it happens with a debit or credit to the inventory account. (the system we have used up to this point)
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NSF cheque
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a cheque returned to the depositor by the bank because there are not sufficient funds in the drawer's chequing account to cover the cheque
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Due Professional Care
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Internal auditors must apply the care and skill expected of a reasonably prudent internal auditor, however, internal auditors are not expected to be infallible.
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Current Value
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The amount of cash, or its equivalent, that could be recieved by selling an asset currently.
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What are the five forces?
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rivalry among existing competitors, threat of new entrants, threat of substitutions (products/services), the buyer's bargaining power, the supplier's bargaining power
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Financial leverage ratio
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measure of credit risk. low is good
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15. Trial balance
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list of all the accounts with their balances.
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Activity input (of driver analysis)
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Result or product of an activity
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define inadequacy
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It results when an asset ceases to be useful to a give enterprise because the demands of the firm have increased.
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Joint and several liability principle
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-Each negligent party could be held liable for total of damaged suffered
-Even if deemed responsible for only a small portion of the loss
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declaration and distribution of stock dividends does what to accounts...
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increases stock holders equity and decreases retained earnings
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When GAAP reported pretax income are higher than actual income taxed, what happens on the balance sheet?
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Creates a deferred tax LIABILITY
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What are the objectives of financial reporting?
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The primary objective of financial reporting is to provide economic information to permit users of the information to make informed decisions.Secondary objectives include:Reflect Prospective Cash Receipts to Investors and CreditorsReflect Prospective Cash Flows to the CompanyReflect the Company's Resources and Claims to the Company
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Difficulties in accounting for R & D Expenditures
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Identifying the costs associated with particular activities, projects or achievementsDetermining the magnitude of the future benefits and length of time over which such benefits may bbe realized
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What type of company might use FIFO?
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One whose selling prices go down (like technology).
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