| Bill and hold transactions | Transactions in which sales of merchandise are billed to customers prior to delivery, with the goods being held by the seller. These transactions may overstate revenues and net income if they do not meet specific requirements for recognition as sales.
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| Bill of lading | A document issued by a common carrier acknowledging the receipt of goods and setting forth the provisions of the transportation agreement.
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| Consignment | A transfer of goods from the owner to another person who acts as the sales agent of the owner.
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| Cost Accounting Standards Board | A five-member board established by Congress to narrowthe options in cost accounting that are available under generally accepted accounting principles. Companies having significant supply contracts with certain U.S. government agencies are subject to the cost accounting standards established by the board.
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| Electronic data interchange (EDI) | A system in which data are exchanged electronically between the computers of different companies. In an EDI system source documents are replaced with electronic transactions created in a standard format.
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| Job time tickets | A document designed to accumulate the labor and machine time devoted to a particular production order.
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| Master production schedule | A schedule that is used to plan overall production for a period of time. The schedule illustrates the gross production of each of the company's products.
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| Observation | The auditors' evidence-gathering technique of viewing a client activity to obtain physical evidence of performance.
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| Periodic inventory system | A method of accounting in which inventories are determined solely by means of a physical inventory at the end of the accounting period.
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| Perpetual inventory system | A method of accounting for inventories in which controlling accounts and subsidiary ledgers are maintained to record receipts and issuances of goods, both in quantities and in dollar amounts. The accuracy of perpetual inventory records is tested periodically by physical inventories.
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| Production order | A document that authorizes the production of a specific quantity of a product.
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| Purchase commitment | A contractual obligation to purchase goods at fixed prices, entered into well in advance of scheduled delivery dates.
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| Sales commitment | A contractual obligation to sell goods at fixed prices, entered into well in advance of scheduled delivery dates.
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| Specialist | A person possessing special skill or knowledge in a field other than accounting or auditing, such as a real estate appraiser.
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