Write short Notes on Self-Balancing Ledgers

Auditing and Assurance Revision Questions and Answers

Answer:
When in an organisation a number of ledgers are maintained, it is usual to find the system of self- balancing or sectional balancing of ledgers in operation. Sectional balancing, as any student of accountancy knows, is just the system of maintaining a total account in the general ledger in respect of each sectional ledger like debtors, creditors, nominal accounts. The self-balancing system is a further improved system which enables the preparation of independent trial balances for each of the separate ledgers means of contra-adjustment accounts. This, as part and parcel of the system of internal check, is of great assistance to the auditors for localising errors. It should however be borne in mind that the only reliable verification of balances of various adjustment accounts in the general ledger lies in the thorough verification of balances of various adjustment accounts in the general ledger lies in the thorough verification of the various personal ledger balances. As regards the routine checking aspects, no special technique is involved. the posting to the individual ledgers and to general ledger account maintained for control purpose should be appropriately checked. Also, the castings and balancing should be tested.



(Visited 86 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published. Required fields are marked *