allowance for doubtful accounts since these reserves are essentially opinion

Allowance for doubtful accounts since these reserves

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allowance for doubtful accounts, since these reserves are essentially opinion-based. In these cases, it is particularly important to justify your actions with adetailed analysis of the reasons for the reserve. This is frequently based onverifiable historical experience with similar transactions, and which you expect tobe repeated in the future. From a practical perspective, only record thosetransactions that an auditor could reasonably be expected to verify through
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normal audit procedures.The Going Concern PrincipleThe going concern principle is the assumption that an entity will remain in businessfor the foreseeable future. Conversely, this means the entity will not be forced tohalt operations and liquidate its assets in the near term at what may be very lowfire-sale prices. By making this assumption, the accountant is justified in deferringthe recognition of certain expenses until a later period, when the entity willpresumably still be in business and using its assets in the most effective mannerpossible.An entity is assumed to be a going concern in the absence of significantinformation to the contrary. An example of such contrary information is an entity’sinability to meet its obligations as they come due without substantial asset sales ordebt restructurings. If such were not the case, an entity would essentially beacquiring assets with the intention of closing its operations and reselling the assetsto another party.If the accountant believes that an entity may no longer be a going concern, thenthis brings up the issue of whether its assets are impaired, which may call forthe write-down of their carrying amount to their liquidation value. Thus, the valueof an entity that is assumed to be a going concern is higher than its breakup value,since a going concern can potentially continue to earn profits.Your Task Requirement 03Business plan The common procedure will include weather a through business research into the industry, customer and competitors have been made. The analysis of a strategy by which results will be achieved.
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Analysis of a proforma financials and the basis on which it has been made.Transaction recording To record a transaction it is necessary to obtain source document on the basis of which the transaction is recorded and appropriate approval has been attach. The source document can be in case of purchase a purchase order or in case of sales transaction a sale order with proper approval has been attached.Reconciliation Process Account reconciliation is the comparison of an account’s general ledger balance to a sub ledger balance, bank or other third party statement, or additional documentation that appropriately supports the account’s balance. Reconciliations may be performed daily, monthly, or quarterly based on whether an account is defined as high, medium, or low risk by the business. Typical high-risk accounts include cash, trade receivables, payables, and financing receivables.Invoicing
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