Procedure in regard to vouching the credit side of the cash book items vouching considerations 1. Vouchers can be sales invoice, purchase invoice, bank statements, minutes book, cash memo, bills, bank paying slip, purchase requisition slip, receipt, salaries and wage sheet, gate keepers note, bank passbook, memorandum and articles of association, delivery challans, stores, records, counterfoil of cheque book, etc. The first item to be checked on the receipt side of the cash book is opening balance. Where automatic tills are in use the entries in the cash book should be checked from the till.
The receipts and payments are recorded in cash book. Vouching includes routine checking which is a mechanical checking, whereas vouching is made on the basis of documentary evidence. All payments except petty cash expenses should be made by cheque. The auditor can go backward also using the help of tracing. From these definitions it is clear that vouching means testing the truth of entries appearing in the primary books of account, vouching includes routine checking of carry forwards, extentions.
Mar 30, 2020 the documentary pieces of evidence such as counterfoil, cash memo, receipts and payinslips used for recording transactions in books of accounts is defined as a voucher. In vouching payments, the auditor does not merely seek. Sales vouching examine the internal control over receipts from sales. The chances of misappropriation of cash are very high that is why auditor has to see that no receipt or payment of cash is unrecorded in cash book.
Cash book is a very important financial book for a business concern. Which points should be considered while vouching of cash. All such types of documentary evidence are known as vouchers. In regard to cash purchases, cash memos and goods inward book should be compared with the entries in the cash book. It should be checking with the balance shown in the audited balance sheet of the previous year. Usually carbon copies of the cash memos or cash sales invoice would support such entries which should be checked.
If they are correct, auditor assumes that others are correct. All receipts and receipts books should be separately and consecutively numbered. The act of examining vouchers is referred to as vouching. For example, purchase transaction should have these supporting documents for preparing voucher. Test check the few bills for ascertaining accuracy of rate, amount, discount and sales taxvat etc. Vouching of cash receipts debit side of cash book opening. If automatic cash recording machines are being used by the entity, the auditor should use. The pay in slip should invariably be used for this purpose.
Outsource bookkeeping service, online accounting service for. The vouching procedure, for cash receipts maybe discussed below the auditor should check the cash book. Cashbook cash payment transactions credit side or payment side of the cash book auditor should satisfy himself that the payment have been actually made. Before starting the vouching of cash book, the auditor should inquire about the internal check system in operation. Bcom 3 rd year auditing vouching study material notes in hindi. The object of vouching is to establish that the transactions recorded in the books of accounts are 1 in order and have been properly authorized and. Vouching of receipt side or debit side of cash book vouchers to.
Sep 19, 2014 vouching the receipt side of cash book vouchers 1. In the companys cash book, the auditor identifies entries of cash sales, receipts from creditors, interest income, dividend income, mortgage payments, fixed asset sales and accounts receivable. Vouching of receipt side or debit side of cashbook or cash receipt transactions. It may be a receipt, invoice, bill, cash memo, bank payinslip, counterfoil of a cheque, correspondences, agreements, resolutions passed in the meeting etc. The auditor should examine the cash book with reference to daily cash sales summary and copies of cash memos. Income for interest and dividend receipts, counterfoils 6. Procedure in regard to vouching the debit side of cash book it is difficult to vouch the receipt of cash because some entries might have been omit altogether. Vouching of receipts of the debit side of the cash book it is rather very difficult to vouch the receipt of cash than to vouch payments as some entries might have been omitted altogether and therefore only an indirect evidence like counterfoils of receipts issued, carbon copies of receipts, contracts and letter from debtors etc. Vouching of cash receipts internal check comparison of the rough cash book with the cash book. Bcom auditing vouching study material notes in hindi. Vouching of receipt side or debit side of cash book. A cashbook refers to an accounting book which records all the cash receipts and the cash disbursements. The required evidence for vouching the cash sales would depend upon the procedure for recording the cash sales in the book.
Vouching of cash and bank books, sale and purchase register, debtors ledger, creditors ledger, general ledger so as to authenticate the figures appearing in the books of accounts of the client. Cash received should be entered on the same date when the cash is actually received. Vouching of debit side of cash book or cash receipts cash book is one of the most important books of accounts. It should be checked with the balance shown in the audited balance sheet of the previous year. Vouching of cash receipt transactions is more difficult than that of cash payment transactions, since there is greater chance of manipulation in regard to cash receipt. Cash received from debtors receipts, bank pass book 4. Since accounts of a business begin with the passing of entries, hence it becomes a basis for further scrutiny to be made at a later stage. Mostly errors and frauds arise in connection with receipts and payments of cash by making its misappropriation, wherever possible. Auditor should take the following precautions while vouching cash receipts or cash payments. The cash balance on any day can be known from cash book. The entries for receipts and payments of cash are checked with reference to various supporting documentary evidences. Cash received from debtors consider the following points for verification of cash received from debtors. It is the practice followed in an audit, with the objective of establishing the authenticity of transactions recorded in the primary books of account. Have been properly recorded in the books of accounts.
Vouching tracks a result backward to the originating event, ensuring that a recorded amount is properly supported. Vouching is defined as the verification of entries in the books of account by examination of documentary evidence or vouchers, such as invoices, debit and credit notes, statements, receipts, etc. Auditing vouching of cash transactions tutorialspoint. Cash book, pass book, bank reconciliation statement dr. Vouchers can be sales invoice, purchase invoice, bank statements, minutes book, cash memo, bills, bank paying slip, purchase requisition slip, receipt, salaries and wage sheet, gate keepers note, bank passbook, memorandum and articles of association, delivery challans, stores, records, counterfoil of cheque book. Amount of cash received should be deposited into the bank daily. A voucher may be a sales bill, purchase bill, payment receipt, payin slip, etc. Reference should be made to the audit working papers to see if the closing balance of the cash shown in the balance sheet is the result of the many. The receipt side or the debit side of the cash book contains items such as opening balance, cash sales, receipts from debtors, receipts from bills discounted and. It is the essence of auditing 1 it is the practice followed in an audit, with the objective of establishing the authenticity of the transactions recorded in the primary books of account.
The auditor, after satisfying himself with regard to the authority and authenticity of transactions, can only then say specifically that the books of account are correct and. The vouching of a cash book is a very difficult process. Bills payable returned bills duly cancelled should be examined. Usually carbon copies of the cash memos or cash sales invoices would support such entries which should be checked from the till records. The object of vouching is to gain assurance regarding the existence assertion. Basically vouching of cash receipts are done on the debit side of the cash book and it is stated that opening balance of the cash book indicates cash in hand at the start of the year and compared from the financial report of the last year taking this balance as closing stock. Examine authorization level for making cash sales and receiving amount therefrom. Correspondence with customer and ledger account should. The techniques of vouching in respect of the important items which usually appear on thedebit side of the cash book.
The main objective of vouching is to find that the transactions that are recorded in the books of accounts are properly recorded and they. Vouching of purchase book the major purpose behind the vouching of purchase book is to confirm that every purchase bill is entered in purchase book and the invoices entered in purchase book are against the actually received goods and payment is made for those actual purchases. Each and every cash entry has to be traced back to its origin and must be verified with the help of appropriate receipt or document. Vouching is a process of checking the vouchers related to the transactions recorded in the books of accounts. The transactions supposed to be recorded only if relevant evidences are available. Meaning of vouching significance of vouching routine checking and couching objective of vouching of cash book vouching of receipt side of cash book vouching of payment to creditors vouching of salary, travelling expenses vouching of purchases returns book vouching. Jan 28, 2020 vouching of cash receipts debit side of cash book we will discuss the cash receipt which are placed on the debit side of cash book for following items. Vouching of cash transactions cash book is the most important of the books of ac for any business. Bose, by vouching is meant the verification of the authority and authenticity of transactions as recorded in the books of account. According to r b bose by vouching is meant the verification.
What is cash book definition, explanation and format. Assisted in carrying out companys internal audit verification of banks reconciliation statements, fixed assets and stock. Two column cash book dr receipts payments cr date 2005 particulars amt dis. Examine the method adopted for depositing daily cash receipts in bank. 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. Vouching of cash receipts general guidelines to auditors. In the case o receipt side of the cash book it is possible that a less amount might have been entered on the counter foil than the money actually received. Vouching of cash transactions cash book is the most important of the books of a c for any business. Auditing vouching of cash transactions we will discuss the cash receipt which are placed on the debit side of cash book for following items. Special attention should be paid to trade discounts if any voucher is missing, he should insist upon getting a duplicate copy of it.
The technique of vouching in respect of the important items which usually appear on the debit side of the cash book is discussed here. Vouching of receipts vouching of receipts means vouching of the cash receipt transactions, verifying the vouchers of the receipts side or debit side of the cash book. Vouching of the important items on the debit side of the cashbook or cash receipt transactions. Entryinthe books of accounts examine the method of depositing cash receipts daily. Working papers may be referred to see that the closing balance of the cash recorded in the balance sheet is the result of many balances. All unused receipt books and cheque books should be kept under lock. Control over the use of receipt book all receipts are on printed forms. Examine the balance shown in the audited balance sheet of the previous year.
Vouching of cash receipts debit side of cash book we will discuss the cash receipt which are placed on the debit side of cash book for following items. Vouching of receipt side or debit side of cash book the receipt side or the debit side of the cash book contains items such as opening balance, cash sales, receipts from debtors, receipts from bills discounted and bills matured, income from investments, sale of investments, sale of fixed assets, loan received, and miscellaneous receipts, etc. Vouching of the payment side of cashbook cheque payments. The carbon copies or counterfoils of cash receipt book should be verified. Cash book is one of the most important books of accounts. Vouching is verification and confirmation of entries that are recorded in the books of account by checking of vouchers or documentary evidence like debit and credit notes, invoices, receipts, statements, etc. The auditor has to ensure that all receipts have been accounted for. If there is any restriction to signing authority to sign the amount to a. Opening balance of cash book 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. The debit side of cash book shows opening balance, cash sales, receipts from debtors, income from interest, dividend, rental income, commission received. Have been sanctioned by a person holding some authority, iv. Receipt date auditor to make note of the date of receipt and compare with date in the cash book. How the auditors vouch the cash book including the receipt.
Vouching is a sort of preliminary work which forms an important part of audit work. Examine carbon copies of the cash receipt or cash sales invoices. Usually, cash receipts are entered first in the unpleasant cash book before they are entered in the cash book. It should be checked with the balance shown in the audited balance sheet of previous year. All spoilt receipts should remain attached to the counter foils. Counter foil or carbon copies to be compared with entries made in cash book.
Jan 07, 2017 steps in vouching receipts from debtors receipts issued auditor can vouch the receipt issued to debtors for collection of money. Consider the following points for verification of cash received from debtors the carbon copies or counterfoils of cash receipt book should be verified. Vouching of debit side of cash book or cash receipts. For example, an auditor is a vouching document of the bill of lading to see if the document supports the number of purchases in the purchase journal. Verify the cash in hand by actually counting it and see whether it agrees with cash book balance. Documentary evidence in support of any business transaction is called as a voucher. The balance of a cash book is posted to the cash account in the ledger. Vouching of cash book cash book is a very important financial book for a business concern. The discount allowed to customers should be properly authorized by a responsible officer. Errors and frauds usually arise in connection with cash receipts. Reference should be made to the audit working papers to see if the closing balance of the cash shown in the balance sheet is the.
The auditor should examine the method adopted for depositing daily cash receipts in the bank. Cash transactions maybe cash receipts or cash payments. Consider the following points for verification of cash received from debtors. Write short note on vouching of cash transactions and. It is through vouching that an auditor can satisfy himself as to the authenticity and completeness of transactions in the books of accounts. All the receipt of cash should be recorded in the cash book. For example, carbon copies or counterfoils of cash receipts. In case large number of cash sales are affected, check cash sales summary book maintained by client. The receipt side or the debit side of the cash book contains items such as opening balance, cash sales, receipts from debtors, receipts from bills discounted and bills matured, income from investments, sale of investments, sale of fixed assets, loan received, and miscellaneous receipts, etc. Vouching is a technical term, which refers to the inspection of documentary evidence supporting and substantiating a transaction, by an auditor. Voucher gives information about the nature and source of the transaction, its value and authority. Gupta to sales 200 15,000 9,800 4,000 jan 5 jan 6 jan 12 jan jan 14 jan 31 by ram purchases by s. Vouching of debit side of cash book or cash receipts auditing.
In vouching payments, the auditor does not merely seek proof. The objects of vouching the payment side of the cash book are to ensure that the payments were properly authorized ascertain that they were entered under their appropriate head of account in the cash book see that payments relate to the business and are a proper business charge, determine that the payments stated to have been made are supported by the required documentary evidence and. Original vouching debits and credits bookkeeping free. Unit4 vouching of cash transactions vouching of cash receipts.
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