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Reconciliation

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Ankit (Querist)
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05 August 2009 Please let me know that how the reconciliation between the debotors and creditors is made while conducting audit of manufacturing company.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 August 2009 Reconciliation can generally be made by understanding the reasons of differences
between the concerned persons/things.

As I could understand, if your question be- How the reconciliation of debtors and creditors is made ? it can be done in the following manner
Debtors:
Total Debtors ( say as on today)
= Total of Drs' Opening Balances+ Credit Sales+ Total Debit Notes to Drs(if any)-Total payments received in Cash or thru bank- Total Credit Notes.
For Crs Reconciliation you have to follow in the same logical manner.

If Particular Ledger A/cs of Drs or Creditors are to be reconciled you note down the items of differences in your Auditee's a/c and the respective drs/crs A/c individually and locate the difference.

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