1. Unit VI Flashcards
Chapter 8

2. Bank reconciliation Review A document explaining the reasons#1
Bank reconciliation
Review
A document explaining the reasons
for the difference between a
depositor’s cash records and the
depositor’s cash balance in its bank
account.
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3. Review Cash equivalent #2 SHOW NEXT
A highly liquid investment that can
be converted into cash in three
months or less.
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4. Cash ratio Review #3 SHOW NEXT A measure of a company’s ability
to pay current liabilities from cash
and cash equivalents: (Cash + Cash
equivalents) / Total current liabilities.
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5. An increase in a bank account.#4
Credit memorandum
Review
An increase in a bank account.
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6. A decrease in a bank account.#5
Debit memorandum
Review
A decrease in a bank account.
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7. A deposit recorded by the company
Deposit in transit #6
Review
A deposit recorded by the company
but not yet by its bank.
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8. Deposit ticket Review #7 A bank form that is completed
by the customer and shows the
amount of each deposit.
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9. Electronic Funds Transfer (EFT)#8
Electronic Funds Transfer (EFT)
Review
A system that transfers cash by
electronic communication rather
than by paper documents.
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10. Review #9 External auditor SHOW NEXT An outside accountant, completely
independent of the business, who
evaluates the controls to ensure
that the financial statements are
presented fairly in accordance with
GAAP.
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11. Review #10 Internal auditor SHOW NEXT An employee of the business who
ensures the company’s employees
are following company policies,
that the company meets all legal
requirements, and that operations
are running efficiently.
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12. Review #11 Petty cash SHOW NEXT A fund containing a small amount
of cash that is used to pay
for minor expenditures.
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13. Sarbanes-Oxley Act (SOX)
#12
Sarbanes-Oxley Act (SOX)
Review
Requires companies to review
internal control and take
responsibility for the accuracy
and completeness of their
financial reports.
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14. Reference Miller-Nobles, T. , Mattison, B. , & Matsumura, E. M. (2016)
Reference Miller-Nobles, T., Mattison, B., & Matsumura, E. M. (2016). Horngren’s accounting (11th ed.). Upper Saddle River, NJ: Pearson.
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