Acctg Flashcards

Terms Definitions
Corporation (Ownership/Management)
Organization Ownership: Separate
GAAP (Definition)
Generally Accepted accounting principles
Biometric Identifier
a physical characteristic (fingerprint, voice, etc.) used to authenticate the identity of a user.
Partnership (Transfer)
Organization Transfer of Ownership: Near to impossible
essential information
information required to conduct business with external parties (such as purchase orders and customer billings)
Normal text that hasn't been encrypted.
Manager only controls cost
Investing activities
transactions that acquire or dispose of long-lived assets-assets that the company expects to provide services for more than a year (What type of activity?)
The total amount charged to customers for merchandise sold, including cash sales and sales on account.
general journal
used to record infrequent or non-routine transactions, such as loan payments and end-of-period adjusting and closing entries
Vulnerability Scans
Automated tools designed to identify whether a given system possesses any well-known vulnerabilities.
Scanning Routines
Software routines that search a program for the occurrence of a particular name or other combination of characters.
Define appraisal costs.
costs of finding defects (inspections)
Legal Feasibility
The dimension of feasibility that determines if there will be any conflicts between the system under consideration and the organization's ability to discharge its legal obligation.
overstated ending inventory
inventory, working capital, current ratio, and net income are overstated and cost of goods sold is understated
Partnership (Earnings Taxed)
Organization Earnings Taxed: Once at personal rates
other income
Revenue from sources other than the primary operating activity of a business (interest, rent, and gains resulting from the sale of fixed assets)
give-get exchange
an event where two entities exchange items such as cash for goods or services
Program Tracing
A technique used to obtain detailed knowledge of the logic of an application program as well as to test the program's compliance with its control specifications.
Vendor Managed Inventory (VMI)
When manufacturers and distributors manage a retail customer's inventory using an EDI.
Manager controls both revenues and costs.
Physical Design
The phase of the systems development life cycle in which the designer specifies the hardware, software, and procedures for delivering the conceptual systems design.
Receiving Report
A document that records details about each delivery, including the date received, shipper, vendor, and purchase order number.
percentage-of-receivables approach
companies may apply this method using one composite rate that reflects an estimate of the uncollectible receivables. Or, companies may set up an aging schedule of accounts receivable, which applies a different percentage based on past experience to the various age categories; balance sheet approach; results in a more accurate valuation of receivables on the balance sheet
Ex:A/R= $500,000
D/A= $10,000 credit before AJE
10% of A/R balance will be uncollectible
500,000 X .10= $50,000
AJE[Bad debt exp $40,000
[D/A $40,000
$5,000 become collectible
[A/R $5,000
[D/A $5,000
[Cash $5,000
[A/R $5,000
perpetual inventory system

continuously tracks changes in the Inventory account; a company records all purchases and sales (issues) of goods directly in the inventory account as they occur
provides a continuous record of the balances in both the Inventory account and the Cost of Goods sold account
Accumulated depreciation (Asset)
the cumulative estimate of the amount tangible assets were used up
periodic inventory system
The inventory system in which the inventory records do not show the amount available for sale or sold during the period.
data source
A component of data flow diagram that represents the people and organizations that send data that the system being modeled uses or produces
Stateful Packet Filtering
A technique employed by firewalls in which a table is maintained that lists all established connections between the organization's computers and the Internet. The firewall consults this table to determine whether an incoming packet is part of an ongoing communication initiated by an internal computer.
Human Resources Management (HRM)/Payroll Cycle
The recurring set of business activities and related data processing operations associated with effectively managing the employee workforce.
earnings statement
a report listing the amount of gross pay, deductions, and net pay for the current period; year to date totals for each category are also listed
Capital Budgeting Model
An estimate of funds to be appropriated for the acquisition of major capital assets and for investment in long-term projects. The estimated benefits are compared with the costs to determine if the system is cost beneficial.
sale without recourse
the purchaser assumes the risk of collectibility and absorbs any credit losses
is an outright sale of the receivables both in form (transfer of title) and substance (transfer of control)
generate CFs quickly, high risk of nonpayment
EX: sell $100,000 of receivables to a factor
factor-finance charge= 1%
make a deposit= 2%
[Cash $97,000
[Finance charge $1,000
[Due from factor $2,000
[Accounts (notes) receivable $100,000
o BE ($)
Fixed Expenses / CM ratio → CM/ selling price.
data value
the actual value stored in a field. it describes a particular attribute of an entity
What profit level should a manager be evaluated on?
Margin in control
Issues in accounting for accounts and notes receivable
recognition, valuation, and disposition 
purchase returns and allowances
An account used to record all returns and allowances received by the business. It can also be used to track the history of supplier problems.
Electronic Funds Transfer (EFT)
The transfer of funds between two or more organization or individuals using computers and other automated technology. Customers can send their remittances electronically to the company's bank and thus eliminate the delay associated with the time the remittance is in the mail.
3 conditions met before company can record a sale
transferred asset has been isolated from the transferor (put beyond reach of the transferor and its creditors)
transferees have obtained the right to pledge or exchange either the transferred assets or beneficial interests in the transferred assets
transferor does not maintain effective control over the transferred assets through an agreement to repurchase or redeem them before their maturity
What are three aspects of a customer profitability analysis?
-Analyzing customers on profit generated work and activities -Cater to your more profitable customers-Reduce handling costs of dealing with less profitable customers
unrealized holding gain or loss
is the net change in the fair value of the receivable from one period to another, exclusive of interest revenue recognized but not recorded.  As a result, the company reports the receivable at fair value each reporting date.  In addition, it reports the change in value as part of net income
Partnership (Ownership/Management)
Organization Ownership: Shared
IASB (Definition)
International Accounting Standards Board
The workstations, servers, printers, and other devices that comprise the organizations network.
Common Stock
Ownership claims with no preferences
facts that are collected, recorder, stored, and processed by an information system to produce information
The process of transforming normal text, called plain-text, into unreadable gibberish, called cipher-text. It is particularly important when confidential data is being transmitted from remote terminals because data transmission lines can be electronically monitored without the user's knowledge.
ordering costs
all expenses associated with processing purchase transactions
SEC (Law)
Companies whose stock is traded publicly in the US are audited annually because of who?
net purchases
determined when purschases returns and allowances and the purchases discounts are deducted from the total purchases
production cycle
the recurring set of business activities and related data processing operations associated with the manufacture of products
Digital certificate
An electronic document, created and digitally signed by a trusted third party, that certifies the identity of the owner of a particular public key. Contains that third party's public key. Thus they provide an automated method for obtaining an organization's or individual's public key.
A postal address to which customers send their remittances. This post office box is maintained by the participating bank, which picks up the checks each day and deposits them to the company's account. The bank sends the remittance advices, an electronic list of all remittances and digital copies of all checks to the company.
voucher system
a method for processing accounts payable in which a disbursement voucher is prepared instead of posting invoices directly to vendor records in the accounts payable subsidiary ledger
Technical Feasibility
The dimension of feasibility concerned with whether a proposed system can be developed given the available technology.
five mgmt assertions
assertions about: existence or occurrence, completeness, allowance or valuation, rights and obligations, presentation and disclosureECARP
Merchandise Inventory (Asset)
items to be sold to customers
gross profit
Sales minus the cost of merchandise sold.
source documents
contain the initial record of a transaction that takes place. Examples: sales invoices, purchase orders, and employee time cards
Parallel Simulation
An approach auditors use to detect unauthorized program changes and data processing accuracy. The auditor writes his or her own version of a program and then preprocesses data. The output of the auditor's program and the client's program are compared to verify that they are the same.
Remittance List
A document listing all checks received in the mail.
expenditure cycle
a recurring set of business activities and related data processing operations associated with the purchase of and payment for goods and services
Computer Programmers
Persons who develop, code, and test computer programs.
Blanket Purchase Order
A commitment to purchase specified items at designated prices from a particular supplier for a set time period, often one year.
Sale with recourse
seller guarantees payment to the purchaser in the even the debtor fails to pay; seller retains risk
EX:recourse liability determined=$10,000
[Cash $97,000
[Finance Charge $11,000
[Due from factor $2,000

[A/R $100,000

[Recourse liability$10,000
dollar value of LIFO

determines and measures any increases and decreases in a pool in terms of total dollar value, not the physical quantity of the goods in the inventory pool
may include a broader range of goods
permits replacement of goods that are similar items, similar in use, or interchangeable 
Land, investment (Asset)
tangible assets that are not used up
merchandise inventory
Merchandise on hand (not sold) at the end of an accounting period.
data destination
a component of data flow diagrams that represents an entity outside of the system who receives data produced by the system,
Multifactor Authentication
The use of two or more authentication methods (passwords, ID badges, biometrics, etc.) in conjunction to achieve a greater level of securtiy.
Payroll Register
A listing of payroll data for each employee for a payroll period.
flexible benefits plan
a plan under which each employee receives some minimum coverage in medical insurance and pension contributions plus additional benefit "credits" that can be used to acquire extra vacation time or additional health insurance the planes are sometimes called cafeteria-style benefit plans because they offer a menu of options
Gantt Chart
A bar graph used for project planning and control. Project activities are shown on the left, and units of time are shown across the top. The time period over which each activity is expected to be performed is represented with a horizontal bar on the graph.
Raw materials inventory
cost assigned to goods and materials on hang but not yet placed into production; can be traced directly to the end product
Investing Decisions: Decrease in cash=
increase in long-lived assets, loans and investments (Investing)
business or transaction cycle
a group of related business processes. the major business cycles are sales and marketing, purchasing and inventory control, production, human resources and payroll and finance
The process of assigning the costs in a cost pool to the cost objectives
LIFO conformity rule
if a company uses LIFO for tax purposes, it must also use LIFO for financial accounting purposes
cost of merchandise sold
The cost that is reported as an expense when merchandise or a manufactured product is sold; also called cost of goods sold.
What is the first thing you calculate in the Order of Operational Budgets?
Sales budge and services
LIFO (last-in, first-out) method

matches the cost of the last goods purchased against revenue
use LIFO for tax and external reporting purposes
doesn't have good valuation of EI
current costs matched with current revenues
Which of the following inventory control methods is most likely to be used by a company that purchases inventory in response to customer orders?a. JITb. EOQc. MRPd. ABC
answer:a. JIT JIT seeks to minimize inventory by only making purchases after sales
What is the equation used in finding the BUDGET PRODUCTION?
Sales units - Beginning + Ending = PRODUCTION*NOTE: Do this for all the months. Last mo.'s ending is next mo.'s beginning
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