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Accounting System

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Submitted By budoor1991
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1. It is a listing of accounts receivable by customer which will agree in total to the amount in the accounts receivable general ledger account. It is arranged in columnar format with the first column being the total owed by the first customer. Normal columns are headed as Total, <30 days, 31-60 days, 61-90 days, and >91 days. The amounts in the total column are sorted by dating of the invoices from the customer. Sample below.

2. The purpose for reviewing the aging report in an audit situation is to test the adequacy of the allowance for doubtful accounts. It can also serve to disclose problems with customers. Usually the auditor would request an explanation of material amounts in the over 90 day column.

3. In normal operations, the aging report is used to provide information to the collections department, to decide whether to write-off accounts, to determine which should be turned over to an attorney, to make credit decisions for existing customers (example: change their credit status to prepayment rather than credit), to compare to the past and to generally assess the effectiveness of credit policies.

4. Information to prepare the report would be gathered from a listing of open invoices sorted by date.

5. An analysis of the general ledger account for accounts receivable and/or the subsidiary ledger for accounts receivable will provide the data.

6. If no accounting records are available, then the open invoice file would be the source. The paper records could be summarized in the format of the schedule below.

7. Machine-readable data could be sorted by date, or more simply by transferring the data to a spreadsheet and adding the aging columns.

8. See the report below and Excel attachment, but if not very readable.

ABC Company
Accounts receivable aging
Date
Total 0-30 days 31-60 days 61-90 days 91+ days

Black

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