Sale proceed of fixed assets should be credited to fixed assets account after deducting expenses on sale of fixed assets if any. Profit or Loss on sale of fixed assets should be booked to revenue account.
SHOULD POINT OF SALES SYSTEM BE CAPITALIZED VERIFICATION
Verification of agent account if sale is made through an agent.
To check minutes of the meetings of the Board of Directors. Verification of subscription received during the year and the subscription receivable.Ĭounterfoil of cash receipt should be verified. Subscription register should be verified. Subscriptions are received from the members of a club and the following points need to be considered by the Auditor while vouching subscription − Dividend or profit or loss on sale of investment is a revenue receipt and the sales proceeds of the investment cost should be booked as capital receipt. To ensure separate accounting is being done for capital receipts and revenue receipts. To verify broker commission, note or debit note, if investments are sold through broker. To check bank statement if the sales proceeds have reached the bank account. If TDS (Tax Deducted at Source) is deducted by the party, there should be proper accounting of TDS. The amount of rent should be verified from the rent deed or the lease deed. The Auditor should verify that the rent for all the twelve month is received or not. In case where the rental income is received from more than one property, separate account for each property should be maintained. It should be through Cheques, Demand Draft, NEFT, RTGS or any other available banking channels.
To ensure that there should be no violation of Income Tax rules as payment of loan exceeding Rs. Verification from bank statement if directly deposited by party into bank.Ĭhecking of carbon copies or counterfoils of cash receipts. Repayment of loan by others may be verified in the following ways −Ĭalculation of interest received and interest should be credited to interest received account. Using teeming and lading method it is a very common method to misappropriate the money, in which the cash received from any customer not recorded in the books and the cash received from same customer at a later instance or another customer recorded in the books and so on. Issuance of receipt for lesser amounts than amount actually received. The discount allowed to customers should be properly authorized by a responsible officer.Ĭorrespondence with customer and ledger account should be tallied.įollowing are the different ways used for misappropriation of cash −Ĭash received from customer not recorded in books and no cash receipt may be issued. The carbon copies or counterfoils of cash receipt book should be verified.Ĭash receipt should be serially numbered.Ĭash received should be entered on the same date when the cash is actually received. Cash Received from DebtorsĬonsider the following points for verification of cash received from debtors − Opening balance of cash book represents cash in hand at the start of the year and should verified from the balance sheet of last financial year. We will discuss the cash receipt which are placed on the debit side of cash book for following items − Opening Balance of Cash Book
Vouching of Cash Receipts (Debit Side of Cash Book)
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