DOC-20240906-WA0005..pptx

Auditing prof. Charanjit kaur banga.

Introduction.

Bills Payable Bills payable is a liability document that reflects the indebtedness of an individual, organization, bank, etc. It represents the money owed by a company to its creditors for goods or services received but not yet paid for. MM by MANUFACTURING MACHINE.

Key Takeaways 1 Short-Term Borrowing Bills payable often represent short-term loans taken by banks from other banks for emergency liquidity or to meet minimum reserve requirements. 2 Accounts Payable In the UK, bills payable is a synonym for accounts payable, a current liability on the balance sheet that represents the total amount owed to suppliers for goods or services. 3 Central Bank Borrowing Commercial banks may borrow from the central bank to maintain liquidity or meet regulatory requirements, contributing to the overall financial system's stability..

Types of Bills Payable Wages Wages represent payments made to employees and contractors for their services. These payments are typically made on a regular basis, such as monthly or bi-weekly. Essential Services Expenses for essential services, such as water, internet, and electricity, are also considered bills payable. These bills are typically paid on a regular basis, such as monthly or quarterly. Goods and Services Acquisition The cost of acquiring goods and services from suppliers, including raw materials and inventory, is also a type of bills payable. These bills are typically paid on a specific payment schedule agreed upon with the supplier..

Examples of Bills Payable Utility Bills Bills for electricity, gas, water, and other utilities are common examples of bills payable. Rent Payments Rent payments for office space, warehouse facilities, or other leased properties are also considered bills payable. Business Loans Loans taken out by businesses for various purposes, such as expansion or working capital, are also classified as bills payable. Supplier Invoices Invoices from suppliers for goods or services purchased on credit are considered bills payable until they are paid..

Auditor's Duty in Verification 1 Schedule of Bills Payable Auditors review the schedule of bills payable to ensure that all outstanding invoices are accurately recorded and accounted for. 2 Verify Unpaid Bills Auditors verify the existence and accuracy of unpaid bills by comparing them to supporting documentation, such as purchase orders and invoices. 3 Vouch Payments Auditors vouch payments made to suppliers by examining supporting documentation, such as canceled checks and bank statements. 4 Examine Cash and Bank Statements Auditors examine cash and bank statements to ensure that all payments related to bills payable have been properly recorded and accounted for..

Importance of Bills Payable Financial Management Bills payable help businesses manage their cash flow by tracking the amount owed to suppliers and ensuring timely payments. Creditworthiness Maintaining a good track record of paying bills on time demonstrates a company's creditworthiness to suppliers and lenders. Penalty Avoidance Paying bills on time helps businesses avoid late payment penalties and maintain good relationships with suppliers. Supplier Relationships Paying bills promptly fosters positive relationships with suppliers, ensuring continued access to goods and services..

Outstanding Expenses Definition Expenses that are due but have not been paid. Occurrence When a company receives the benefit of an expense but has not yet paid for it. Accounting Treated as a liability on the balance sheet. Audit Procedures Occurrence checks, completeness checks, classification, cut off assertion, accuracy checks, and manual receipt processes..

Examples of Outstanding Expenses Past Due Rent Rent that is due from a previous period but has not yet been paid. Unpaid Bills Invoices for goods or services that have been received but not yet paid. Subscriptions Subscriptions for services, such as software or online subscriptions, that are due but not yet paid..

Group members Amreen Sayed [roll no 29] 1. Snehal pawar [roll no 21] 2. Archana jaiswar [roll no 10] 3. Riya sankpal [roll no 27] 4. Thankyou for your attention.