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28 Cards in this Set
- Front
- Back
Four steps in general ledger reporting
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1. update general ledger
2. post adjusting entries 3. Prepare financial statements 4. produce managerial reports |
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Who updates the general ledger?
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The office of the treasurer
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general ledger and reporting system
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produce periodic reports but also supports online inquires for both internal and external users
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threats and controls
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threat:
-inaccurate or invalid GL data -unauthorized disclosure or financial information -loss or destruction of master data control: -use various processing controls to minimize risk of data input errors -restrict access so only authorized employees can make changes to master data -multifactor authentication and physical security controls -employ the backup and disaster recovery procedures |
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Control Procedure for Errors in updating the general ledger and generating reports
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validity checks, field check, zero balance check, completeness check, closed loop verification, creating standard adjusting entry file for recurring expenses like depreciation, sign check, run to run totals; reconciliation of accounts that do not match debits and credits and checking subsidiary accounts with general ledger and control reports like a general journal listing or a trial balance; audit trail
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journal voucher file
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contains the information that would be found in the general journal in a manual accounting system: the date of the journal entry, the accounts debited and credited, and the amounts
-a by-product not an input to the posting process |
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trial balance
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a report that lists the balances for all general ledger accounts
-a form of reconciliation |
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detective controls that should be used to identify inaccurate and unauthorized journal entries
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1. reconciliation and control reports
2. maintenance of an adequate audit trail |
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audit trail
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a traceable path that shows how a transaction flows through the information system to affect general ledger account balances
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Who performs adjusting entries?
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Controller
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five types of adjusting entries and where they stored
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accruals, deferrals, estimates, revaluations, corrections
stored in: the journal voucher file |
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accruals
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entries made at the end of the accounting period to reflect events that have occurred but for which cash as not yet been received or distributed
-wages payable and interest revenue earned |
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deferrals
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entries made at the end of the period for exchanges of cash prior to the performance of the event that the cash was for. like prepaid rent expense
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estimates
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reflect a portion of expenses that occur over a number of accounting periods. like depreciation
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revaluations
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used to record differences between recorded and actual values. like changing inventory to reflect new accurate counts
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corrections
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used to fix errors in the general ledger
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threats and control for posting adjusting entries
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threat:
-inaccurate and unauthorized adjusting journal entries control: -create a standard adjusting entry file for reoccurring entries made each period, like depreciation expense |
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step three: prepare financial statements
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"close the books" both monthly and annually
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Difference between GAAP and IFRS
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-Accounting for fixed assets
-Accounting for R&D costs -IFRS does not permit the use of LIFO for accounting for inventory |
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XBRL: Revolutionizing the reporting process
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eXtensible Business Reporting Language. a variation of xml specifically for transmitting financial data. makes it so companys do not have to write financial data in multiple formats. xbrl can be manipulated into different formats by the information seeker
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instance document
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contains the facts about specific financial statement line items, including their values, and contextual information such as the measurement (dollars, euros,pesos) and whether the value is for a specific point in time (BS item) or a period of time (I/S item)
-created by applying a taxonomy to a set of data |
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taxonomy
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a set of files that defines the various elements and the relationship between them
-one part is a schema which is a file that contains the definitions of every element that could appear in an instance document -accountant must select appropriate taxonomy |
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linkbases
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define the relationship among elements includes:
1. reference 2. calculation 3. definition 4. presentation 5. label |
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step four: Produce Managerial reports, final step
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produce a number of budgets to help managers plan and evaluate performance and performance reports
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responsibility accounting
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producing a set of correlated reports that break down the organization's overall performance by the specific subunits which can most directly control these activities
con: budget number is static and does not reflect unforeseen changes in the operating environment |
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threats and controls for: Producing Managerial reports
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threats:
-poorly designed reports and graphs controls: |
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flexible budget
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the budgeted amounts vary in relation to some measure of organizational activity, mitigates such problems
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balanced scorecard
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a report that provides a multidimensional perspective of organization performance
-contains measures reflecting 4 perspectives: 1. organizational (financial) 2. customer 3. internal operations 4. innovation and learning -shows goals and specific measurements that reflect performance in attaining those goals |