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AP Audit of Accounts Receivable - Google Drive

The document outlines an audit of Pinnacle Corporation's accounts receivable, detailing discrepancies between the general ledger and subsidiary ledger. It highlights issues with customer payments, including misposted payments and unreceived goods, affecting the reported balances. Confirmation letters sent to customers revealed further inconsistencies that require investigation.

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Franze Cinco
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400 views1 page

AP Audit of Accounts Receivable - Google Drive

The document outlines an audit of Pinnacle Corporation's accounts receivable, detailing discrepancies between the general ledger and subsidiary ledger. It highlights issues with customer payments, including misposted payments and unreceived goods, affecting the reported balances. Confirmation letters sent to customers revealed further inconsistencies that require investigation.

Uploaded by

Franze Cinco
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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AUDITING PRACTICE

Audit of Accounts Receivable

PROBLEM 1

Pinnacle Corporation’s general ledger showed the following information:

Accounts Receivable P550,000 (debit)


Allowance for Doub!ul Accounts 16,500 (debit)

On the other hand, the accounts receivable subsidiary ledger shows the following composition:

Invoice Date Invoice Amount Balance


Customer A 12/06 P42,000
11/29 63,540 P105,540

Customer B 9/27 36,000


8/20 26,760 62,760

Customer C 12/30 20,000


12/08 40,000
10/25 31,800 91,800

Customer D 11/17 69,420


10/09 66,000 135,420

Customer E 12/12 57,600


8/20 37,200 94,800

Customer F 9/12 52,200 52,200

Audit notes:

a. Accounts receivable con"rmation le#ers were sent to the customers. You have noted the
following:

Customer Balance per reply Remarks

Customer B P36,000 Invoice dated 8/20 was already se#led. Investigation


revealed that Customer B’s payment was erroneously
posted against Customer E’s account for an invoice
dated 12/20 for the same amount.

Customer C 71,800 The di$erence was due to the invoice dated 12/30.
Goods have not yet been received by Customer C as
of December 31. Terms of sale is FOB Destination.

Customer E 121,560 “Amount per our records appear to be higher, so


please check”.

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