acc chapter 4 and 5

errors

accidental errors in recording transactions

fraud

person intentionally deceives another person

occupational fraud

the use of ones occupation for personal enrichment through misapplication of the employer’s resources

internal controls

safeguard a company’s assets and improve accuracy and reliability of accounting information

responsible for internal control

CFOs and auditors

collusion

2 or more people acting together to circumvent internal controls

bank reconciliation

matches the balance of cash in the bank account with the balance of cash in the company’s own records

timing differences

occur when the company records transactions either before or after the bank records the same transactions

petty cash fund

small amount of cash kept on hand to pay for minor purposes

net accounts receivable

less the allowance for uncollectible accounts