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Hi sir, regarding the audit procedures for bank and cash.
I dont understand the following procedure
” Examine any old unpresented cheques to assess if they need to be written back into the purchase ledger as they are no longer valid to be presented”
What do they mean by old unpresented cheques ? Could you explain this procedure ?
For june 2013 exam, question 1(c), in the answer key, they have stated the following procedures
” obtain Fox’s current account bank reconciliation and cast to ensure arithmetical accuracy ”
” For the current account, agree the balance per the bank statement to an original year end bank statement and also to the bank confirmation letter”
1) What is the difference between a current and saving(deposit) account ?
2) why for the above procedures, they only mentioned about the current account and both the accounts ?
1 An unpresented cheque is one that the payee has not paid into the bank. If a long time passes, the cheque is no longer valid (6 months in UK). If the cheque is no longer valid, the payment has not been made so should be written back to the cash book and creditor’s account.
2 The current account is the busy account where most payments and receipts are handled. The deposit account is where spare cash is put to earn some interest. Both accounts need to be verified by reconciling them to bank statements and the bank confirmation letter
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