Accouting Test 2

30 terms by les35 

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internal control

set of policies and procedures designed to ensure proper accounting for transactions

signature card

verifies bankers signature, to open a checking account

deposit ticket

form showing a detailed listing of items being deposited

American Bankers Associations Number

ABA number, number that is the small fraction printed in the upper right-hand corner of each check

Magnetic Ink Character Recognition Code

MICR code, on lower left side of the front of each check

endorsement

stamping or writing depositors name

blank endorsement

deposit for simple signing the back of the check

restrictive enorsement

depositor adds words

check

a document ordering a bank to pay cash from a depositors account

drawer

the depositor who orders the bank to pay the cash

drawee

the bank on which the check is drawn

payee

the person being paid the cash

bank reconciliation

process of bringing the book and bank balances into agreement

deposits in transit

deposits that have not reached or been recorded by the bank before the statement is prepared

outstanding checks

checks issued that have not been presented to the bank for payment before the statement is prepared

service charges

bank charges for services such as check printing

collections

collections of promissory notes or charge accounts made by the bank on behalf of the depositor

Not Sufficient Funds Check

NSF, checks deposited by the depositor that are not paid because the drawer didn't have sufficient funds

Errors

errors made by the bank of the depositor in recording cash transactions

Employee

who works under the control and direction of an employer

independent contractor

performs a service for a fee and does not work under the control and direction of the company paying for the work

Fair Labor Standards Act

FLSA Act, requires employers to pay over time at 11/2 times the regular rate to any hourly employee working over 40 hours

withholding allowance

exempts a specific dollar amount of an employers gross pay from federal income tax withholding

Federal Insurance Contributions Act

FICA Act, requires employers to withhold taxes from employees earnings

self-employment income

net income of a trade or business run by an individual

self-employment tax

a contribution to the FICA program

Federal Unemployment Tax Act Tax

FUTA Tax, levied only on employers

State Unemployment Tax Tax

SUTA Tax, levied only on employers in most states

Merit-Rating System

encourages employers to provide regular employment to workers

Workers Compensation Insurance

provides insurance for employees who suffer a job-related illness of injury

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