An auditor reconciles the total of the accounts receivable subsidiary ledger to the general ledger control account, as at 30 June 2015.By this procedure, the auditor would be most likely to learn of which of the following?
A)An April cheque from a customer was posted in error to the account of another customer with a similar name.
B)An April invoice was improperly computed.
C)An account balance is past due and should be written off.
D)An opening balance in a subsidiary ledger account was improperly carried forward from the previous accounting period.

Question

Quizplus · Accepted Answer

Reconciling the accounts receivable subsidiary ledger to the general ledger control account ensures that all transactions have been properly recorded and that any errors or discrepancies are identified. In this case, the auditor would most likely learn of an error in the opening balance of a subsidiary ledger account which was carried forward incorrectly from the previous accounting period. This is because reconciling the accounts requires comparing the closing balance of the previous period to the opening balance of the current period. Other types of errors, such as those related to individual transactions, would not necessarily be identified through this reconciliation process alone.

An Auditor Reconciles the Total of the Accounts Receivable Subsidiary