Audit Adjustments in General ledger

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You can enter your audit adjustments at General ledger (GL) Journal                                      See Audit Adjustment - Accounts Receivables or See General ledger audit adjustments


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]

 

Click [Add]

 

 

At date field, enter the last date of the financial year , e.g. 31/03/2020. for the audit adjustments

 

Expenses Accrued

Assuming there is a under provision of audit fee for year ending March 2020 for the amount outstanding.
Your auditor will pass an entry to debit (or credit) your retained earnings or unappropriated profit & loss account

  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

Next, print the Profit and Loss and Balance sheet as at March 2020 to check if it tally with the audited accounts

 

See Audit Adjustment - Accounts Receivables   or Audit Adjustment - Accounts Payable


 

Related Topics

FAQ - Opening Balance - GL not ready ?

 

FAQ : Unappropriated Profit & Loss posting not allowed

 

 

 

 

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