Question

In a certain company, one accountant records most of the adjusting journal entries at the end of the month. What type of analysis could be used to identify that this happens and the cumulative size of the transactions that the one accountant records? Is this a problem or if not, when would it be?

Answer 1

A)Any software the company generally uses for accounting purpose will have posting date and accounting/document date.Now what is the difference between posting date and accounting/ document date

Posting date:

this is the date when the transaction has been entered or posted in the system ie the date on which it is actually brought into books of accounts

Accounting/ Document Date:

This is the date on which the transaction has actually incurred and the date on which the transaction should actually be recorded.

From the above one can identify when the entries are posted in delay.

b) Delay in posting shall have an adverse impact in the following cases,

1.Cash will not get tallied in turn you will not know what is should be the actual cash balance you should have in your hand.

2.Chances of ommision of entries being recorded

3.Bank reconciliation entries may not get tallied

4.if cash has been stolen insurance may not be claimed for the fullest if physical cash was more than the book.

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