Sales proceeds of junk materials

Auditing and Assurance Revision Questions and Answers

Sales proceeds of junk materials are to be vouched with special attention to the following points:
 Review the internal control on junk materials is as regards its generation, storage and disposal and see whether it was properly followed at every stage.
 Ascertain whether the organization is maintaining reasonable records for the sale and disposal of junk materials.
 Review the production and cost records for the determination of extent of junk materials that may arise in a given period.
 Compare the income from the sale of junk materials with the corresponding figures of the preceding three years.
 Check the rates at which different types of junk materials have been sold and compare the same with the rates that prevailed in the preceding years.
 See that all junk materials sold have been billed and check the calculation on the invoices.
 Ensure that there exists a proper procedure to identify the junk material and goods quality material is not mixed up with it.
 Make an overall assessment of the value of the realization from the sale of junk materials on to its reasonableness.

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