CHAPTER 7: Internal Control and Cash

cash

Resources that consist of coins, currency, cheques, and money orders that are acceptable at face value on deposit in a bank or similar institution.

cash equivalents

Short-term, highly liquid (easily sold) held for trading investments that are subject to an insignificant risk of changes in value.

collusion

Two or more individuals working together to get around prescribed control activities.

deposits in transit

Amounts deposited at a bank and recorded by the depositor that have not yet been recorded by the bank.

fraud

Intentional misappropriation of assets or misstatement of financial information.

NSF (non-sufficient funds)

(also known as a returned cheque) A cheque that has been deposited but is returned by a bank because there are insufficient funds in the bank account of the customer who wrote the cheque.

outstanding cheques

Cheques issued (written and distributed) and recorded by a company that have not yet been paid (cleared) by the bank.