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Accounting. Audit and Tax
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Subject Topic: Reconciliation of Balance Sheet and P&L. (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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ultimatecpa
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Posted: 25 Apr 2008 at 10:15 | IP Logged  

What does 'Reconciliation of balance sheet and profit & loss accounts' exactly mean? It is one of the audit procedures which we perform while conducting financial statements audit of companies. What do we exactly do in this reconciliation?

Any input in this regard will be appreciated. Thanks





Edited by ultimatecpa on 25 Apr 2008 at 11:18
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auditor
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Posted: 26 Apr 2008 at 15:40 | IP Logged  

When you reconcile a Balance sheet account you normally take those entries/transaction which makes up the balance at month end in the General Ledger.

Just like you reconcile Balance sheet you normally anyalze expenses (P&L) accounts. You also reconcile expenses at month end.

Does it make sense?

Thanks

Faisal

 

 

 

 



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mcpa
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Posted: 29 Apr 2008 at 22:36 | IP Logged  

When you reconcile the balance sheet accounts you usually reconcile or balance them against the subsidiary ledgers or other supporting schedules.  The income statement reconciliations should also reconcile against all paid invoice or supporting documentation.  The sales and cost of goods sold accounts are usually the largest and you can use a sales subsidiary ledger or sales detail report.

The reconciliations are to double check your entries and balances recorded in the general ledger.  The balances need to be supported with schedules or subsidiary ledgers to add credibility to the financial statements.

 

mcpa

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