Internal Controls
More than one person is required to complete a task so no one person has control over the task.
What is segregation of duties?
The name of the type of business owned by an individual.
What is a sole proprietorship?
A standard used to evaluate financial performance. A point of comparison.
What is a benchmark?
The name for the filing status of a husband and wife who file together on one return.
What is Married Filing Jointly?
An inventory conducted by counting, weighing, or measuring items of merchandise on hand.
What is a physical inventory?
Ethical integrity of upper management.
What is Tone at the Top?
The name for the money an owner invests in the business.
What is capital?
A comparison of one item on a financial statement with the same item on a previous period's financial statment.
What is horizontal analysis?
The name for any business that does not file its own tax return but reports expenses and earnings on one or more individual's tax return.
What is a pass-through entity?
True or false: Arithmetic errors in bookkeeping can sometimes be found by dividing the amount of the discrepancy by 2 or 9.
What is true?
The internal control that would involve locking safes, requiring passwords, and removing cash from registers nightly.
What are physical controls, or safeguarding of assets?
The name for any money paid to employees, either hourly or in a fixed salary.
What are wages?
To perform vertical analysis, each item on the income statement is divided by this.
What is net sales?
A reduction in the amount of income subject to tax.
What is a deduction?
An accounting device used to analyze individual transactions into credit and debit parts.
What is a T account?
What is an audit?
The portion of the cost of an asset that is expensed each period to account for the loss of value.
What is depreciation?
To perform vertical analysis, each item on the balance sheet is divided by this.
What is total assets?
The crime of illegally avoiding a legally-imposed tax.
What is tax evasion?
The branch of accounting tasked with investigating, uncovering and preventing fraudulent activity.
What is forensic accounting?
The internal control which requires receipts, memoranda, invoices and canceled checks to be archived.
The 1040 schedule used by a sole proprietorship to report income and expenses.
What is Schedule C?
To analyze the amount of debt a business is carrying, a manager could perform horizontal and vertical analysis of which financial statement?
What is the balance sheet?
The set amount of money that the government does not tax, which is based on filing status.
What is the standard deduction?
A tax that is used to discourage LEGAL behavior.
What is a sin tax?