Answer each in 3 or more sentences.
What do you do if your G/L A/R balance states $1M and your subsidiary ledger says $800K?
What are the most common errors in working with General Accounting, Fixed Assets, Revenue (billing)?
What would you do to ensure these errors do not happen?© BrainMass Inc. brainmass.com June 3, 2020, 8:56 pm ad1c9bdddf
Assuming the entire general ledger is in balance (A = L+E), it is more likely that the problem is in the detail, not the GL. Even more likely is that certain entries made into the general ledger have not been posted to the detail. That's the answer for a system that is not integrated such that entries made to the detail are automatically posted to the general ledger. In either system, I would be looking at odd entries in the GL: manually prepared sales invoices, progress billings, for example. Next I would scan the detail for odd entries like credit memos that don't show in the GL. This is a very typical setup for fraud: the accounts receivable person credits a vendor's account for a cut of the savings. The other type of error could be a timing difference. Payments in the GL might be dated Dec 1 but posted to the detail on Nov ...
The 568-word solution addresses the questions in detail including examples of types of common errors. Fraud is a common theme mentioned in each of the scenarios. For the Accounts receivable detail out of balance to the general ledger, a step-by-step process is listed to identify the differences. Two paragraphs of the solution discuss how to avoid errors in the future with specific comments about systems and employees.