Auditing Vouching of Ledger – Learn Auditing in simple and easy steps starting from Following steps are involved in the audit of impersonal ledger account −. this post explains about impersonal ledger and its auditing. The auditor’s duty is to inspect the relevant accounts in the ledger, demand notes, receipts, etc., and find out what period is covered.
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These expenses are shown as assets in Balance sheet and should be written off in profit and Loss account over a numbers of accounting periods. The auditor should note that impersonl has created reasonable amount Of provision for dispute. The auditor should call for a schedule of such purchased and ensure that Purchases Account is debited with their total amount and the amount is shown as a liability in the Balance Sheet.
Facts may be imperslnal about disputed amount.
The renewal may create doubtful debts. Whether TDS is deposited in time or not. Hence, it is necessary to include the wages and salaries for March while debiting oedger item to the current year’s Profit and LossAccount and to show wages and salaries for March in the Balance Sheet as a liability.
Vouching of Impersonal Ledger – Vouching, Auditing & Secretarial practice B Com Notes | EduRev
Totals and balances of impersonal ledger should be ratified with the balance shown in trial balance. Posting of all vouchers in ledger account from cash and bank book, sales register, bills receivable register, sales return register and journal should be verified. Opening balance of impersonal ledger should be verified with the audited account of previous year.
If the difference is large the matter should be investigated further. Some say it should not be shown as current impfrsonal because the audit work of current year’s account is done in the next year and so it impetsonal next impersohal expense. The regular renewal means bad debts. EduRev is a knowledge-sharing community that depends on everyone being able to pitch in when they know something.
As these incomes have accrued in the current year, it is but natural that such incomes should be credited to current year’s Profit and Loss Account.
It can become business asset in future.
The auditor should check amount of such liability. Expenses of heavy repairs of fixed assets shall not be debited to profit and loss account of year in which these expenses incurred but it should be spread to number of years like other deferred revenue expenses. For example, if any person filed a suit against company, possibilities are there, it may be in favor of company or it may be against the company, in case it will decide against the company, company has to uadit such amount of suit as the court decides.
The difference between the two sides of an account is known as Account Balance. Prepaid expenses are those expenses which have been paid in the current year but the benefit of which will be received in the forthcoming year. Others say that audit fee is paid for the work of impersnal current year and hence, it should be charged to the lsdger year’s Profit and Loss Account and shown as a liability in the Balance Sheet.
Such adjustments relate to pedger assets and liabilities and depreciation etc. The auditor can check insurance agreement.
The auditor should check agreement for sale of debtors. Such accounts are extracted from ledgers.
ledgee The company may have filed case in court of law against another company for infringement of copyrights or trademarks. Expenses which pertain to the current year and should have been paid but have not actually been paid during the same year are called unpaid or ‘outstanding expenses’. He should ensure that these have been charged to Profit and Loss Account and shown as a liability in the Balance Sheet.
The auditor must vouch bills renewed. The auditor should bad debts account in detail.
Therefore it is must for an Auditor to check each and every outstanding entries. The entry may be processed directly from the voucher to the ledger. This book should be signed by a responsible officer. Mine Company can provide a guarantee for others to provide loans. The sales ledger may be kept on self balances system.
Such interest is to be collected next year. The amount of tax paid should be checked. No doubt main audit work start after the close of financial year and finalization of financial statements are done in next financial year but it is a widely accepted practice to do so. Credit balance indicates that the person has given more benefits to the business than what he has taken from the business.
In the first case, audit fees will be debited and the audit fees payable will be credited. He can also make comparison of the current year’s I figures of the preceding years to assess the amounts payable.
A contingent asset is one that is not business asset at present. The entry cannot be made unless goods and invoices are received. The treatment of these liabilities should be the same as that of the outstanding wages and salaries, if the expenses relate to the current accounting year these must be debited to the Aufit and Loss Account of the current ledber, whether they have been paid or not. The auditor I should inspect the ledger accounts, the demand notes, the receipts, etc, in order to ascertain such outstanding expenses.
He can compare it with sales ledger to determine amount due, 3. The entries appearing in sales journals and sales return journal are posted impfrsonal sales debtors ledger; The remaining accounts are maintained in general ledger.
With the help of this book, the auditor can easily ascertain the outstanding and accrued items for which the adjusting entries should have been passed. When business is small one ledger is sufficient to keep a record of personal and impersonal accounts. The auditor can vouch the amount of imoersonal in arrears. Both these arguments appear to be sound. Auditor should thoroughly check the totals of the various other books of original entry and also the postings of their totals of the impersonal ledger.