![]() Documentation ReviewĪ documentation review is the most common form of account reconciliation, and the one that auditors prefer. There are two ways to reconcile an account, which are noted below. Usually, this means moving an expense into a different account. However, this may be done simply to verify that transactions were recorded in the correct account a reconciliation may reveal that a transaction should be shifted into a different account. It is less common to reconcile a revenue or expense account, since the account balances are flushed out at the end of each fiscal year. ![]() That the transactions included in an asset, liability, or equity account are valid, and so should not be flushed out of the balance sheet by shifting the transactions into accounts associated with the income statement.Īuditors want to see an account reconciliation for larger accounts, though reconciliations should be performed even in the absence of an auditor request, since this is a good accounting practice that leads to more accurate financial statements.Īn account reconciliation is usually done for all asset, liability, and equity accounts, since their account balances may continue on for many years. Examples of such fields are vendor default account numbers, preferred vendors for inventory, multiple shipping addresses for customers, and default Customer Sales Tax settings.That the transactions included in a revenue, expense, gain, or loss account belong in that account, and so should not be shifted into an account that more closely matches the nature of the transaction or You will need to manually enter such fields after the conversion. In some cases, fields are not compatible and are not transferred over.
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