Solved

Match Each of the Following Terms with the Appropriate Definitions

Question 200

Matching

Match each of the following terms with the appropriate definitions.

Premises:

Responses:

Gross method

A document used by the purchasing department to place an order with a vendor purchase.

Bank reconciliation

Principles requiring management to establish responsibility, maintain adequate records, insure assets, separate recordkeeping from custody of assets, divide responsibility for related transactions, apply technological controls, and perform reviews.

Voucher

A method of recording purchases at the full invoice price without deducting any cash discounts.

Principles of internal control

The ability of a company to pay for its short-term obligations.

Petty Cash

A measure of the liquidity of receivables computed by taking the current balance of receivables and dividing by periods credit sales and then multiplied by 365.

Liquidity

An income statement account used to record cash overages and cash shortages arising from missing petty cash receipts or from errors in making change.

Cash Over and Short

An internal document used to report that ordered goods are received and to describe the quantity and condition.

Receiving report

A report that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Purchase order

A fund used for disbursements related to small items such as postage.

Days' sales uncollected

An internal business document (or file) used to accumulate information to control cash disbursements and to ensure that the transaction is properly recorded.