Financial Accounting Chapter 6 Exam Questions with Latest Update
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Course
Financial Accounting
Institution
Financial Accounting
accounting controls - Answer-procedures companies implement to safeguard assets and to ensure accurate and reliable accounting records and reports
administrative controls - Answer-procedures companies implement to evaluate performance and monitor compliance with company policies and public laws
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Financial Accounting Chapter 6 Exam
Questions with Latest Update
accounting controls - Answer-procedures companies implement to safeguard assets
and to ensure accurate and reliable accounting records and reports
administrative controls - Answer-procedures companies implement to evaluate
performance and monitor compliance with company policies and public laws
adverse opinion - Answer-opinion issued by a certified public accountant that means
one or more departures from GAAP in a company's financial statements are so very
material the auditors believe the financial statements do not fairly represent the
company's status; contrast with unqualified opinion
audits - Answer-detailed examination of some aspect of a company's accounting
records or operating procedures in order to report the results to interested parties
authority manual - Answer-written documentation outlining levels of authority and
responsibility. The authority manual provides specific guidelines, such as those for a
personnel officer, as well as general guidelines, such as giving all vice presidents
authorization to approve up to a designated spending limit
bank reconciliation - Answer-schedule that identifies and explains differences between
the cash balance reported by the bank and the cash balance in the company's
accounting records
bank statement - Answer-record issued by a bank (usually monthly) of all activity in the
bank account for that period
bank statement credit memo - Answer-bank statement enclosure that describes an
increase in the account balance
bank statement debit memo - Answer-bank statement enclosure that describes a
decrease in the account balance
cash - Answer-coins, currency, checks, balances in checking and certain savings
accounts, money orders, bank drafts certificates of deposit, and other items that are
payable on demand
cash short and over - Answer-account used to record the amount of cash shortages or
overages; shortages represent expenses and overages represent revenues
certified check - Answer-check guaranteed by a bank to be drawn on an account with
sufficient funds to pay the check
, certified public accountants (CPAs) - Answer-accountant who, by meeting certain
educational and experiential requirements, is licensed by the state government to
provide adult services to the public
checks - Answer-prenumbered forms, sometimes multicopy, preprinted on the face with
the name of the business issuing them, authorizing the bank to disburse funds from the
issuer's account. The issuer enters the transaction date, the desired payee, and the
amount in the appropriate places on the check form
confidentiality - Answer-code of ethics requirement that prohibits CPAs from voluntarily
disclosing information they acquire as a result of accountant-client relationships
deposit ticket - Answer-bank form submitted along with funds that identifies the account
number, account name, and a record of the checks and cash being put in the account
deposits in transit - Answer-deposits added to a depositor's books but not received and
recorded by the bank prior to the date of the bank statement
disclaimer of opinion - Answer-report on financial statements issued when the auditor is
unable to obtain enough information to determine if the statements conform to GAAP; is
neither positive nor negative
fidelity bond - Answer-insurance policy that a company buys to insure itself against loss
due to employee dishonesty
financial statements audit - Answer-detailed examination of a company's accounting
records and the documents that support the information reported in the financial
statements; includes testing the reliability of the underlying accounting system used to
produce the financial reports
general authority - Answer-company guidelines that apply to various levels of a
company's management, such as requiring everyone at that level to fly coach class
imprest basis - Answer-maintaining an account at a specified fixed amount, such as
periodically replenishing a petty cash fund to its imports amount
independent auditor - Answer-licensed certified public accountant engaged to audit a
company's financial statements; not an employee of the audited company
internal controls - Answer-policies and procedures companies establish to provide
reasonable assurance of reducing fraud, providing reliable accounting records, and
accomplishing organization objectives
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