Vouching of ledger

Auditing – vouching of ledger

There are two types of ledger which are general ledger or nominal ledger which represents real accounts or nominal accounts so the work of an auditor is to vouch the items appearing in the impersonal ledger thoroughly so that there was no little chance of manipulation by fictitious entries of expenses can be eliminated. An auditor is bound to make many ledgers for keeping the account clear or without creating any misunderstanding between any of the accounts he is keeping a record of. Names of some of the ledgers kept by the auditor are personal ledger account, purchase ledger, sales ledger, impersonal ledger accounts and many more to this title.

  1. Ledgers are the secondary books of accounts in which posting is made from the primary books of account. The audit of ledgers is thus an important step in the process of verification of the correctness of the final accounts.
  2. It is an occasion to review the transactions entered during an accounting period, duly classified in the totality.


What are impersonal ledger accounts and role of prepaid expenses?

As discusses earlier ledgers has many work and so as different names and have different accounts within them as capital account, nominal account and real account these account falls under impersonal ledger on the other hand income and expenditure which comes under nominal accounts transferred to profit and loss account whereas capital account, real account, debtors account and creditors account are then transferred to balance sheet. These transfers need some confirmations like opening balance should be verified from last year’s balance sheet, timely posting of balances subsidiary books which include sales book, purchase book, sale return book and purchase return book to the ledger account. This balances one more expense of recorded which is prepaid expenses which means those payments which are done or paid in advance for the next coming year. So this particular expense is debited to profit and loss account of the current year to arrive at true financial results. It is the responsibility of the auditor to vouch for every nominal account to confirm whether the exact and correct amount of expenses is debited to profit and loss account or not.

Which account is responsible for the transaction of outstanding expenses and audit fees?

Outstanding expenses are those expenses that are somehow left to be paid to someone. These are some expenses or liabilities that come up in due course of business. These outstanding expenses including many expenses and fees which are due to some employees or any firm. If audit fees are to be taken into consideration then audit fees are one of the parts of these outstanding expenses as these fees are debited to profit and loss account of the same for which audit is conducted.


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