Separation of duties dividing responsibility between

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Financial Accounting: The Impact on Decision Makers
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Chapter 8 / Exercise 01
Financial Accounting: The Impact on Decision Makers
Norton/Porter
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Separation of DutiesDividing responsibility between two or more people to limit fraud and promote accuracy of accounting recordsEncryptionRearranging plain-text messages by a mathematical process—the primary method of achieving security in e-commerce.FirewallA device that enables members of a local network to access the network, while keeping nonmembers out of the network.CollusionTwo or more people working together to circumvent internal controls and defraud a company.Remittance AdviceAn optional attachment to a check that tells the business the reason for the payment.
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Financial Accounting: The Impact on Decision Makers
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Chapter 8 / Exercise 01
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
Lock-Box SystemA system in which customers send their checks to a post office box that belongs to a bank. A bank employee empties the box daily and records the deposits into the company's bank account.Electronic Data Interchange (EDI)A streamlined process that bypasses paper documents altogether. Computers of customers communicate directly with the computers of suppliers to automate routine business transactions.Evaluated Receipts Settlement (ERS)A procedure that compresses the payment approval process into a single step by comparing the receiving report to the purchase order.VoucherA sequentially numbered document authorizing a cash payment.Petty CashA fund containing a small amount of cash that is used to pay for minor expenditures.Imprest SystemA way to account for petty cash by maintaining a constant balance in the petty cash account. At any time, cash plus petty cash tickets must total the amount allocated to the petty cash fund.CheckA document that instructs a bank to pay the designated person or business a specified amount of money.
Deposit TicketA bank form that is completed by the customer and shows the amount of each deposit. H A P T ER 8MakerThe party who issues the check.PayeeThe individual or business to whom the check is paid.Signature CardA card that shows each authorized person's signature for a bank account.Account NumberOn a check, the number that identifies the account upon which the payment is drawn.Bank StatementA document from the bank that reports the activity in the customer's account. It shows the bank account's beginning and ending balances and lists the month's cash transactions conducted through the bank account.Canceled ChecksPhysical or scanned copies of the maker's cashed (paid) checks.Routing NumberOn a check, the 9-digit number that identifies the bank upon which the payment is drawn.
Bank ReconciliationA document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its bank account.Deposit in TransitA deposit recorded by the company but not yet by its bank.Electronic Funds Transfer (EFT)A system that transfers cash by electronic communication rather than by paper documents.

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