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Scrutiny Of Creditors

Sadanand (Articleship) (42 Points)

14 December 2007

Kindly help me in this topic:

While doing scrutiny of Creditors what all points need to be considered.Also While Checking Import purchase parties what all points to be raised.

Kindly help me out!

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Vidya (Service) (40 Points)
Replied 14 December 2007

Creditors Scrutiny: 1.Ensure that the o/s balance is paid in next year. There shoulnt be any long o/s invoices. 2.Get confirmations from selected creditors, especially intercompany creditors For Import Purchases: 1.Verify teh PO with the vendor 2.Verify the FEMA documents are in palce(viz A1 form) 3.Verify the invoice and the booking of the same and also teh exchange rates at which teh transaction is recorded.

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Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 14 December 2007

creditors scrutiny: 1. obtain confimations of all major creditors 2. AO may call for name and addresses of creditors and then send direct notices to them for details of tranasctions with the assesee 3. see debit notes and credit notes appearing the creditors confirmations or their accounts are duly accounted for in you accourts 4. At least obtain balance confirmations of all the creditors 5. Prepare reconciliations for diffrences if any in your books and books of the creditors.........their statement of account with you and your statement of accout with them 6. Explain old creditors .......may be the liabilty is no longer there 7. so on

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