Inquire about or review list of credit balances and investigate large/unusual items.
Credit balances can arise for a number of reasons (e.g., a customer has mistakenly overpaid, a credit note has been issued after the customer has paid, unallocated cash that the Company has received from customers that they have been unable to allocate against a specific receivable). Since credit balances represent amounts that the Company owes to other entities, a credit balance is really a creditor and therefore should be classified as such.
Unusual balances - This could be particular large or small balances, or balances or customers that appear inconsistent with your knowledge of the business, or particularly old balances.
Collocated cash - This refers to money that the Company has received from customers that they have been unable to allocate against a specific debtor. Discuss the situation with the client and check that the amount was allocated post year end. Consider the age of collocated cash to check if action is being taken to match the cash against actual debts.
Related parties transactions
Inquire about or review list of credit balances and investigate large/unusual items.
Credit balances can arise for a number of reasons (e.g., a customer has mistakenly overpaid, a credit note has been issued after the customer has paid, unallocated cash that the Company has received from customers that they have been unable to allocate against a specific receivable). Since credit balances represent amounts that the Company owes to other entities, a credit balance is really a creditor and therefore should be classified as such.
Unusual balances - This could be particular large or small balances, or balances or customers that appear inconsistent with your knowledge of the business, or particularly old balances.
Collocated cash - This refers to money that the Company has received from customers that they have been unable to allocate against a specific debtor. Discuss the situation with the client and check that the amount was allocated post year end. Consider the age of collocated cash to check if action is being taken to match the cash against actual debts.
Related parties transactions
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