Vouching of Cash Transactions | Auditing - Cash Paid To Creditors | 11th Auditing : Chapter 6 and 7 : Vouching of Cash Transactions
Chapter: 11th Auditing : Chapter 6 and 7 : Vouching of Cash Transactions
Cash Paid To Creditors
Cash Paid To Creditors
While vouching cash payment to creditors, the
auditor should examine the system of Internal control in existence. He should
check the entries in the cash book with the receipts issued by creditors or
counterfoils of cheque book and bank statement. He should compare the ledger
balances of creditors with statement of accounts sent by them. Further, the
auditor should ensure that all payments made to creditors are properly
authorized by a responsible official. When payment was made as full and final
settlement, auditor should verify whether the company has been availed any
discount and is accounted as discount received.
Documents to be Vouched: Receipts issued by
creditors, Invoices, Statement of accounts
of creditors, Bank statement.
Example
On 12.3.17, Paid cash to Rakesh
Rs.22,000 being supplier of goods.
Vouching of Cash paid to Creditors.
Auditor should vouch the transaction
in the following manner:
1. Verify entry in Cash Book with
respect to date, name of creditor or supplier and amount paid.
2. Verify entry in Creditor or
Supplier Account with reference to date and amount.
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