Cash & Internal Controls
Money and any medium of exchange that a bank accepts at face value
Cash
Reset temporary accounts to zero for the next accounting period
Closing Entries
These are unintentional mistakes made during the accounting process.
Errors
True or False: Finance doesn't interact with any other business functions or departments.
True
Tendency to follow authority figures, even if unethical
Obedience to Authority
Preventing theft and fraud, accurate financial reporting and maintaining business operations are a few reasons businesses need these.
Cash Controls or Internal Controls
This account is used to close out temporary accounts at the end of the accounting period.
Income summary
These are intentional actions to deceive, or for personal gain.
Fraud
Is this finance or accounting? Boosts growth, reduce risks
Finance
Trading securities based on material, non-public information; like giving your friend a "tip" about business growth that isn't public knowledge yet.
Insider Trading
In this internal control, No single person should handle all aspects of a transaction
These types of journal entries ensure transactions are recorded in the correct accounting period.
Adjusting Entries
The first step in identifying errors or fraud is found by completing this step in accounting cycle.
Trial Balance
What would a business do with retained profits?
reinvest in the business
Prioritizing personal gain over ethical considerations
Self-Interest
This control involves comparing two sets of records to ensure they match to help identify errors or discrepancies.
reconciliation
These permanent accounts are closed at the end of the accounting cycle.
Assets, Liabilities
This kind of error occurs when a transaction is completely left out of the accounting records.
Error of Omission
What is the purpose of financial regulations?
Protect investors and maintain fair, efficient markets
Past investments influencing future decisions, even if irrational
Sunk Costs
Examples of this category of controls include locks, passwords, or authorization requirements.
preventative controls
These temporary accounts are closed at the end of each period.
Revenue, Expense
A journal entry made to fix an error in the accounting records.
Correcting Entry
What is the focus of the finance function?
Managing money and investments to maximize shareholder value
Tendency to avoid losses more strongly than seeking gains
Loss Aversion