How Do You Test for Completeness of Accounts Payable?


Quick Answer

Testing for the completeness of accounts payable is a six-step process. Completing each step before beginning the next offers the best and most complete results for determining whether or not complete account payable records exist, says SEMO.edu.

Continue Reading
Related Videos

Full Answer

First, use a control account to reconcile the accounts payable ledger, explains SEMO.edu. Second, buy a reliable cutoff test. These tests account for all the goods with titles that have or have not changed hands. Critical to these tests are FOB shipping point and FOB destination. Third, carefully access the turnover rate of accounts payable. This analytical procedure determines the standard, and investigates any questionable relations.

Step four involves a cutoff test for the disbursement of cash. Determine if the accounts payable and cash distributions reconcile, and take the last written check to trace it to its subsidiary ledger, advises SEMO.edu. Step five involves matching recorded payments to the payments. Determine if checks issued match payable accounts. Checks that do not correspond to a payable account indicate an unrecorded liability.

The final step involves the search for unvouchered payables. These payments lack the requisition, report or seller's invoice required for completing a voucher. Locate all of the unmatched documents for the voucher, instructs SEMO.edu

Learn more about Accounting

Related Questions