Audit Adjustments in General ledger
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You had earlier provide for your audit fee to be $2,000.00 for your last financial year as an expense in your Profit & Loss accounts.
Assuming your auditor comes back with some audit adjustments to the accounts ending March 2020
At [A/c Entry], click [GL Journal]
At date field, enter the last date of the financial year , e.g. 31/03/2020. for the audit adjustments
Assuming there is a under provision of audit fee for year ending March 2020 for the amount outstanding.
Dr Unappropriated Profit & Loss 800
Cr Accruals 800
You are to Debit to Audit Fee and Credit Accruals, instead of Debiting the Unappropriated Profit and Loss.
FAQ: Why can't we debit the Unappropriated P/L account direct, as per the audit adjustments.
Ans: When you do that , your audit fee will always be $2,000.00 when you do a yearly comparison of your P&L and all other expenses not provided, now provide under audit adjustments will be posted to the unappropriated p&l accounts.
The fact is that the true cost of your audit fee, should be $2,800.00, that is why it should be posted to audit fee (or other chart of accounts for other adjustments ) instead of Unappropriated P/L accounts.
Provision for Dividend
Dr Dividend 15,000
Cr Provision for Dividend 15,000
Provision for bad (doubtful) Debts
Dr Bad debt expense 3,000.00
Cr Provision for doubtful debt 3,000.00
Above audit adjustments to be taken on the last day of the financial year on 31st March 2020