A client erroneously recorded a large purchase twice.Which of the following internal controls would be most likely to detect this error in a timely and efficient manner?
A) Footing the purchases journal.
B) Reconciling vendors' monthly statements with subsidiary payable ledger accounts.
C) Tracing totals from the purchases journal to the ledger accounts.
D) Sending written quarterly confirmations to all vendors.

Question

Quizplus · Accepted Answer

Reconciling vendors' monthly statements with subsidiary payable ledger accounts would compare the recorded transactions in the ledger with the actual transactions reported by the vendor. This reconciliation process would likely identify any duplicate purchase entries. Footing the purchases journal would only verify calculations of individual entries, tracing totals from the purchases journal to the ledger accounts would only verify that the correct amount was posted to each account, and sending written quarterly confirmations to all vendors may not identify double entries.

A Client Erroneously Recorded a Large Purchase Twice