Understanding Accounts Payable and Liabilities
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ScribdTranslationsUnderstanding Accounts Payable and Liabilities
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ScribdTranslationsAccounts payable and other liabilities
Source and nature of accounts receivable.
The nature of accounts payable is of creditor origin, they must be distinguished.
very well the origin of debts, that is, if the debt was generated by a purchase of
credit, which will give rise to a commercial accounts payable if its
origin is different, it should be classified under another accounts payable.
Definition of accounts payable:
These are the debts that arise from the purchase of tangible goods,
services received, expenses incurred and acquisition of fixed assets or contracts
investments in process.
Accounts payable can be defined as obligations that the
company, as a consequence of economic activity
Analysis: these are the debts that a company incurs with different creditors or
suppliers, the result of having acquired certain goods or services.
Importance of accounts payable in a company:
Having a detailed follow-up of accounts payable is very important for
a company. Through that control, the company conveys trust and security to its
clients and their employees.
Analysis:
I understand that they are of utmost importance, since through which the company or business
maintain proper control of accounts payable, they have the opportunity to settle
acquire material goods, a good service from suppliers just as it generates
trust between suppliers, customers, and employees.
What are uncollectible accounts:
It is an accounts receivable resulting from a credit sale that is considered without
possibilities of recovery.
Analysis:
These are debts that are generated from the sale of merchandise on credit and that for
being considered uncollectible causes a loss to the company.
Short-term accounts payable:
They are the debts incurred by the company for loans received and other debts.
with a maturity not exceeding one year
Analysis: These are debts that are recorded as accounts payable in less than
twelve months or one year.
Long-term accounts payable:
They are debts with suppliers arising from the entity's usual operations, with
maturity later than twelve (12) months from contracted.
Analysis:
These are the accounts payable incurred by the company due to debt with
suppliers, registered with an expiration greater than twelve months.
Internal control of accounts payable:
Within the internal controls that must be kept for accounts payable, there
establishes a very definitive segregation of governmental functions, which
it allows a definition of control tasks for each one and such controls will be
verified by the following department until their accounting and registration.
To have control over payments to suppliers, it is determined as a rule
general that nominative checks are issued with joint signatures, with which
the responsibility will fall on at least two people preferably unrelated to the
accounting and cash.
Principle and procedure of internal control of accounts payable.
The receiving functions in the warehouse must be separated from the authorization of the
payment and signing of the check for its settlement.
It is necessary to periodically reconcile the amounts received and pending payment.
according to accounting controls, with those of the suppliers.
Payment Files must be prepared for suppliers containing each
Invoice, its corresponding Reception Report (when applicable) and the
check or reference of the payment, canceling the Invoices with the stamp of
Paid.
It is necessary to keep the Subsidiary Accounts Payable up to date.
Accounts Payable Various and do not present aged balances.
Accounts Payable to Suppliers and Various must be itemized by
each invoice received and each payment made; as well as by ages and analyzed.
by the Board of Directors.
Returns and claims made to suppliers must
control yourself to ensure that payments are made for what is actually received.
Monthly, the sum of the balances of all must be verified.
Subaccounts of Accounts Payable match with those of the accounts of
corresponding controls
Audit tests for accounts payable:
Evaluate the detailed ledger of accounts payable
2. Reconcile payments to suppliers vs supporting documentation
3. Reconcile vendor statements vs detailed ledger
4. Sending confirmations to suppliers
5. Apply antithetical procedures to accounts payable
6. Search for unregistered accounts payable
7. Identify accounts payable to related parties
8. Evaluate the assessment, presentation, and disclosure of accounts payable.
Audit programs:
For the preparation of the audit programs, three aspects must be taken into account.
fundamentals, which are:
1. Understand the internal control of accounts payable.
2. Evaluate the risk of internal control based on the application of tests
substantive and compliance.
3. Conduct substantive tests to evaluate the controls over the
records.
Objective of auditing accounts payable and other liabilities.
Describe the nature of accounts payable and other assets.
Identify and explain the fundamental controls of accounts payable.
Assess the risks of material, inherent, and control errors of the accounts for
pay and other liabilities.
Design control tests that allow auditors to confirm the level
risk assessment of the control of accounts payable and other liabilities.
Describe the audit objectives of accounts payable.
Explain how auditors design substantive tests to correct the
risks of material misstatement in the involved accounts.
Characteristic procedures for auditing accounts payable.
There are several procedures for auditing accounts payable.
what are the following:
1. Examine the internal control of accounts payable.
2. Examine the inherent risks, including fraud.
3. Apply substantive tests to transactions and account balances
to be paid.
Audit of other liabilities.
Current liabilities:
They are liquid assets and rights of a company, that is, the money that a
the company has available to dispose at any time.
Analysis: they are goods or resources of the company that can be converted into money
how they are. Cash on hand, raw materials, accounts receivable, etc.
NIC applied for accounts payable.
IAS 39 is contained in paragraphs 1 to 110 and in appendices A and B.
The NIC establishes the rules for the knowledge, measurement, and disclosure of
information about the financial assets and liabilities held by the company
including the accounting for hedging operations.
This will be valid for the financial statements covering accounting periods
whose beginning is January 1, 2001. Application is allowed to
previous periods, as long as it is applied from the beginning of the period whose
final year after March 15, 1999, the date of the issuance of IAS 39
Objective of IAS 39.
It is the establishment of a principle for the knowledge and measurement of the
financial assets and financial liabilities, as well as some purchase contracts
and sales of non-financial items.
The NIC 32. They are used in this standard with the meanings specified in the
Paragraph II of IAS 32.
Objective of the ISA.
The objective of this standard is to establish the accounting principles for the
recognition, measurement, and disclosure of information regarding the
financial instruments, in the financial statements of the business company.
This standard must be applied to contracts based on raw materials
quoted, which give either party the right to settle it in cash or
with any other financial instrument, except for contracts
Reflection and writing.
It is important to highlight that accounts payable are one of the main topics addressed in
an entity or economic company because they are the ones that sustain the business
operational, as they are the ones who control the debts that the company has with
third parties, since they are the ones who provide the purchases and services.
On the other hand, I have learned that theobjectivewhat
is pursued regarding
toprocedureAccounts payable must be accurate at the time of payment.
the debts contracted with third parties outside the company as well as the
benefits that these accounts fulfill, since without them it would be impossible to comply with
all the goals set bythe organization.
Another very important part is the auditing process that involves accounts payable.
so that it can operate correctly according to the auditing standards
that govern it.