CSUF ACCT 201A – Hatton: Questions And Answers
cash basis of accounting Right Ans - practice of recording revenues when
cash is received and recording expenses when the expense is paid.
creditors Right Ans - a person or company (bank) to whom money is owed
to
bank service charge Right Ans - an administrative expense which reports
fees incurred by a company for the expenses associated with its checking
account transactions
market value Right Ans - the amount for which something can be sold on a
given market
allowance for doubtful accounts Right Ans - a balance sheet account that
reduces the reported amount of accounts receivable
accumulated depreciation Right Ans - the cumulative depreciation of an
asset up to a single point in its life
documentation procedures Right Ans - 1. use prenumbered documents and
all documents should be accounted for and 2. promptly forward source
documents for accounting entries to the accounting department
independent internal verification Right Ans - involves the review of data
prepared by employees
establishment of responsibilities Right Ans - control is most effective when
only one person is responsible for a given task
segregation of duties Right Ans - 1. different individuals should be
responsible for related activities and 2. the responsibility for record keeping
for an asset should be separate from the physical custody of that asset
accrual basis of accounting Right Ans - accounting basis in which
companies record, in the periods in which the events occur, transactions that
change a company's financial statements, even if cash was not exchanged
cash basis of accounting Right Ans - practice of recording revenues when
cash is received and recording expenses when the expense is paid.
creditors Right Ans - a person or company (bank) to whom money is owed
to
bank service charge Right Ans - an administrative expense which reports
fees incurred by a company for the expenses associated with its checking
account transactions
market value Right Ans - the amount for which something can be sold on a
given market
allowance for doubtful accounts Right Ans - a balance sheet account that
reduces the reported amount of accounts receivable
accumulated depreciation Right Ans - the cumulative depreciation of an
asset up to a single point in its life
documentation procedures Right Ans - 1. use prenumbered documents and
all documents should be accounted for and 2. promptly forward source
documents for accounting entries to the accounting department
independent internal verification Right Ans - involves the review of data
prepared by employees
establishment of responsibilities Right Ans - control is most effective when
only one person is responsible for a given task
segregation of duties Right Ans - 1. different individuals should be
responsible for related activities and 2. the responsibility for record keeping
for an asset should be separate from the physical custody of that asset
accrual basis of accounting Right Ans - accounting basis in which
companies record, in the periods in which the events occur, transactions that
change a company's financial statements, even if cash was not exchanged
