ACC 221 Study Guide - Final Guide: Accounting Scandals, Accounts Receivable, Red Entertainment

• School: Miami University
• Department: Accountancy
• Course: ACC 221
• Professor: All

Document Summary

[ x ] sarbanes-oxley act - response to accounting scandals of early 2000s. Provides guidelines realted to auditor-client relations and additional internal controls. [ x ] internal control a company"s plan to: improve accuracy and reliability of accounting information, safeguard the company"s assets. Components include ethical management, risk assessment, control (separate) activities, information and communication. Timing differences and errors can be made by the company or bank. [ x ] journal entries resulting from a bank account reconciliation: debit cash - credit interest revenue and notes receivable, credit cash - debit accounts receivable and cash outflows (advertising, service charge, and rent) [ x ] credit sales and accounts receivable. Companies record an asset (accounts receivable) and revenue when they sell products and services to their customers on account, expecting payment in the future. Trade discounts - a reduction in the listed price of a product/service only recognized by recording the sale at the discounted price.