Match Each of the Following Terms with the Appropriate Definitions

question 79

Essay

Match each of the following terms with the appropriate definitions.
1. Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records.
2. A method of initially recording purchases at the full invoice price ignoring any cash discount.
3. A document used within the company to notify the appropriate persons that ordered goods have been received and to describe the quantity and condition of the goods.
4. An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change.
5. A measure of how quickly a company can convert its accounts receivable into cash.
6. A document the purchasing department uses to place an order with a supplier.
7. A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.
8. A method of initially recording purchases at the invoice price less any purchase discounts offered by the seller.
9. A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.
10. The ability of a company to pay for its near-term obligations.

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Definitions:

Equivalent Annual Annuity

A method used in capital budgeting to compare the profitability of investments with different lifespan by converting them into an equivalent annuity.

Net Present Value

The calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

Cost of Capital

The return rate that a company must earn on its investment projects to maintain its market value and attract funds.

Capital Rationing

The process of selecting the best projects for investment under conditions of limited resources, ensuring optimal utilization of capital.