Accounting Tools

APRIL 11, 2024

What is Tracing in Auditing? Tracing is the process of following a transaction in the accounting records back to the source document. She makes a random selection of the purchases recorded by the client, and reviews the purchase order authorization for each one, as well as the associated receiving record and supplier invoice.

General Ledger 40

General Ledger Purchase Order Auditing Billing 40

Accounting Tools

APRIL 8, 2024

Controls over accounts receivable really begin with the initial creation of a customer invoice , since you must minimize several issues during the creation of accounts receivable before you can have a comprehensive set of controls over this key asset. Review accounts receivable journal entries.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

APRIL 16, 2024

To cook the books involves using accounting trickery to enhance an organization’s financial results. Incorrect Expense Reserves A more subtle cooking the books practice is setting up expense reserves , such as the allowance for doubtful accounts , that do not reflect the actual loss rate. What is Cook the Books?

Auditing 74

Auditing Invoicing Accounting Accounting 74

Accounting Tools

MAY 13, 2024

What is a Real Account? A real account is an account that retains and rolls forward its ending balance at the end of the year. The areas in the balance sheet in which real accounts are found are assets , liabilities , and equity. Presentation of Real Accounts Real accounts are not listed in the income statement.

Accounting 40

Accounting Accounting Bookkeeping Accounts Payable 40

Accounting Tools

SEPTEMBER 7, 2023

Related Courses Bookkeeping Guidebook How to Audit Receivables New Controller Guidebook Accounts receivable is the amount owed to a seller by a customer. Accounts receivable is listed as a current asset on the balance sheet , since it is usually convertible into cash in less than one year.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Accounting 75

Accounting Tools

MAY 15, 2023

Related Courses Bookkeeping Guidebook How to Audit Receivables New Controller Guidebook The Difference Between the Direct Write-Off and Allowance Methods Under the direct write-off method , a bad debt is charged to expense as soon as it is apparent that an invoice will not be paid.

Reconciling 75

Reconciling Invoicing Accounts Receivable Accounts Receivable 75

Accounting Tools

JULY 16, 2023

Related Courses Forensic Analytics Guide to Analytical Procedures Guide to Audit Sampling Guide to Data Analytics for Audits How to Conduct an Audit Engagement What are Analytical Procedures? Analytical procedures are a type of evidence used during an audit. This is a form of ratio analysis.

Auditing 75

Auditing Financial Records Accounts Payable Accounts Payable 75

Accounting Tools

APRIL 28, 2024

Examples of short-term liabilities are as follows: Trade accounts payable. Includes deposits received from customers for goods or services not yet delivered to them. Other accounts payable. Includes all other obligations of the business that are not included in the preceding list of liability accounts. Accrued expenses.

Deposits 40

Deposits Accounts Payable Accounts Payable Tax 40

Accounting Tools

MAY 10, 2024

Once the cash payments have recovered the seller's costs, all remaining cash receipts (if any) are recorded in income as received. This approach is to be used when there is considerable uncertainty regarding the collection of a receivable. When to Recognize Revenue

Collections 75

Collections Bookkeeping Billing Auditing 75

Accounting Tools

NOVEMBER 3, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook The accrual basis of accounting is used to record revenues and expenses in the period in which they are earned, irrespective of the timing of the associated cash flows. How do we convert accrual basis accounting records to the cash basis? Subtract accounts receivable.

Accruals 75

Accruals Accounting Accounting Accounts Payable 75

Accounting Tools

OCTOBER 24, 2023

Related Courses How to Audit Payroll Optimal Accounting for Payroll Payroll Management An advance paid to an employee is essentially a short-term loan from the employer. Related Articles Payroll Accounting Payroll Entries As such, it is recorded as a current asset in the company's balance sheet.

Payroll 75

Payroll Auditing Accounting Accounting 75

Accounting Tools

JUNE 14, 2023

Related Courses How to Conduct a Compilation Engagement How to Conduct a Review Engagement How to Conduct an Audit Engagement What is a Financial Statement Review? A review does not require the accountant to obtain an understanding of internal control , or to assess fraud risk , or other types of audit procedures.

Financial Statements 75

Financial Statements Auditing Accruals Financial Reporting 75

Accounting Tools

JUNE 12, 2023

Related Courses How to Conduct a Compilation Engagement How to Conduct a Review Engagement How to Conduct an Audit Engagement What is a Financial Statement Audit? A financial statement audit is the examination of an entity's financial statements and accompanying disclosures by an independent auditor. Accounts receivable.

Financial Statements 76

Financial Statements Auditing General Ledger Bank Reconciliation 76

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook New Controller Guidebook An accountant is a person who records business transactions on behalf of an organization, reports on company performance to management, and issues financial statements. Management reports are issued to the management team.

General Ledger 75

General Ledger Accounting Accounting Financial Statements 75

Accounting Tools

JUNE 12, 2023

Related Courses Bookkeeping Guidebook How to Audit Receivables New Controller Guidebook The reconciliation of accounts receivable is the process of matching the detailed amounts of unpaid customer billings to the accounts receivable total stated in the general ledger.

Reconciling 75

Reconciling Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

APRIL 25, 2024

The party that initially received this check and cashed it must reverse the transaction in its accounting records once it has been notified by the bank. Reasons for a Returned Check The usual reason for a returned check is that the account on which it was drawn does not contain enough funds to pay for the full amount of the check.

Bank Reconciliation 40

Bank Reconciliation Bookkeeping Auditing Accounting 40

Accounting Tools

JANUARY 9, 2024

What are Government Auditing Standards? Government auditing standards are used to conduct financial audits and performance audits of government entities and entities that receive government awards. Performance audits are used to measure the performance of a project or program against previously defined objectives.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

JUNE 20, 2023

Related Courses Accounting for Intangible Assets Fixed Assets Accounting How to Audit Fixed Assets What are Assets? An asset is something that is expected to yield a benefit in a future period. If an asset is expected to be entirely consumed within the current period, then it is instead charged to expense in that period.

Computation 75

Computation Deposits Auditing Accounting 75

Accounting Tools

OCTOBER 11, 2023

Related Courses Accountants’ Guidebook Bookkeeper Education Bundle Bookkeeping Guidebook Introduction to Accounting Basics Accounting is the practice of recording and reporting on business transactions. This means setting up accounts in which financial information is stored. Examples are accounts receivable and inventory.

Accounting 75

Accounting Accounting Record Keeping Purchase Order 75

Accounting Tools

AUGUST 7, 2023

Related Courses Optimal Accounting for Cash How to Audit Cash The Balance Sheet What are Cash and Cash Equivalents? However, such an analysis may be excessively conservative if there are receivables that can be readily converted into cash within a few days; in this case, receivables should also be included in the analysis.

Petty cash 75

Petty cash Billing Auditing Accounting 75

Accounting Tools

OCTOBER 12, 2023

Related Courses Bookkeeping Guidebook Credit and Collection Guidebook How to Audit Receivables What is a Bad Debt? A bad debt is a receivable that a customer will not pay. Accounting for Bad Debt There are two ways to record a bad debt, which are the direct write-off method and the allowance method.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Accruals 75

Accounting Tools

FEBRUARY 8, 2024

When someone wants to withdraw cash from the petty cash fund, that person fills out the cash voucher to indicate the reason for the withdrawal, and receives cash from the petty cash custodian in exchange. The vouchers are then stored as accounting records. A cash voucher is a standard form used to document a petty cash payment.

Petty cash 75

Petty cash Reconciling Financial Statements Bookkeeping 75

Accounting Tools

SEPTEMBER 2, 2023

Related Courses How to Audit Receivables How to Conduct an Audit Engagement How to Audit Accounts Receivable If your company is subject to an annual audit , the auditors will review its accounts receivable in some detail. Test invoices listed in receivable report.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Auditing 40

Accounting Tools

JULY 17, 2023

Related Courses Bookkeeping Guidebook How to Audit Receivables New Controller Guidebook A bad debt can be written off using either the direct write off method or the provision method. There are two ways to account for a bad debt, which are noted below. The first approach tends to delay recognition of the bad debt expense.

Invoicing 75

Invoicing Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

APRIL 7, 2024

A liability is recorded in the general ledger , in a liability-type account that has a natural credit balance. A number of examples of liability accounts are presented in the following list, which is split into current and long-term liabilities: Examples of Current Liabilities The following are examples of current liabilities.

General Ledger 75

General Ledger Payroll Deposits Invoicing 75

Accounting Tools

OCTOBER 20, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook Under the cash basis of accounting , business transactions are only recorded when the cash related to them is either issued or received. The cash basis is commonly used in small businesses, since it requires only a limited amount of accounting expertise.

Accruals 76

Accruals Accounting Accounting Accounts Receivable 76

Accounting Tools

MAY 21, 2023

Related Courses How to Audit Cash How to Audit Fixed Assets How to Audit Inventory How to Audit Receivables How to Conduct an Audit Engagement What are Management Assertions? The auditors test the validity of these assertions by conducting a number of audit tests. Completeness. Occurrence.

Auditing 75

Auditing Financial Statements General Ledger Accounting 75

Accounting Tools

NOVEMBER 24, 2023

Example of a Negative Confirmation For example, a confirmation letter tells a customer that the client company's records at year-end show an ending accounts receivable balance for that customer of $500,000. They are also commonly used with suppliers to confirm small-dollar account balances.

Auditing 40

Auditing Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

OCTOBER 13, 2023

Related Courses How to Conduct an Audit Engagement A scope limitation is a restriction on an audit that is caused by the client, issues beyond the control of the client, or other events that do not allow the auditor to complete all aspects of his or her audit procedures.

Auditing 40

Auditing Financial Statements Accounts Receivable Accounts Receivable 40

Accounting Tools

NOVEMBER 8, 2023

Related Courses Guide to Analytical Procedures How to Conduct an Audit Engagement What is a Reasonableness Test? A reasonableness test is an auditing procedure that examines the validity of accounting information. Related Articles Compliance Test Dual-Purpose Test Substantive Testing Tests of Details Walk-Through Test

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 20, 2023

Related Courses Fixed Asset Accounting How to Audit Fixed Assets Accounting for the sale of land differs from the accounting for the sale of any other type of fixed asset , because there is no accumulated depreciation expense to remove from the accounting records. Why Land is Not Depreciated

General Ledger 75

General Ledger Accounting Accounting Auditing 75

Accounting Tools

FEBRUARY 28, 2024

The foundation of this reasoning is the accounting equation , which is as follows: Assets = Liabilities + Shareholders' equity The accounting equation appears in the structure of the balance sheet , where assets (with natural debit balances) offset liabilities and shareholders' equity (with natural credit balances).

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Bookkeeping 40

Accounting Tools

OCTOBER 27, 2023

Related Courses Fraud Examination Fraud Schemes How to Audit for Fraud What is Window Dressing? These actions are taken shortly before the end of an accounting period. Related Articles Accounting Cushion Aggressive Accounting Controller’s Cushion Creative Accounting Managed Earnings

Accounting 75

Accounting Accounting Financial Statements Accounts Receivable 75

Cloud Accounting Podcast

MAY 16, 2023

Subscribe to the Earmark Accounting Podcast: [link] Get CPE for listening to podcasts with Earmark CPE: [link] Show Notes KPMG pens deal with MindBridge to apply AI to digital audits | Accounting Today [link] We ran the CPA exam through ChatGPT and it failed miserably | Accounting Today [link] I Cloned Myself With AI.

CPA 52

CPA Auditing Tax Billing 52

Accounting Tools

JUNE 10, 2023

Related Courses Bookkeeping Guidebook Corporate Cash Management How to Audit Cash What is a Restrictive Endorsement? An example of a restrictive endorsement is the "For Deposit Only" stamp used by most companies on the back of a received check. Related Articles Joint Endorsement

Deposits 75

Deposits Bookkeeping Auditing Bank Reconciliation 75

Accounting Tools

JULY 29, 2023

Related Courses Bookkeeping Guidebook Corporate Cash Management How to Audit Cash Reconciling a bank statement involves comparing the bank's records of checking account activity with your own records of activity for the same account. To reconcile a bank statement, follow the steps noted below.

Reconciling 75

Reconciling Bank Reconciliation Deposits Auditing 75

Accounting Tools

JULY 21, 2023

Related Courses Guide to Audit Sampling How to Conduct an Audit Engagement What is Variables Sampling? For example, a limited sample size can be used to compute the average accounts receivable balance, as well as a statistical derivation of the plus or minus range of the total receivables value that is under review.

Computation 40

Computation Auditing Accounts Receivable Accounts Receivable 40