Question

(This is review question 13-9 from page 425, which had been assigned as homework.) Explain the purpose of footing and crossfooting the sales journal and tracing the totals to the general ledger

Answer 1

the sales journal must be correctly totaled and posted to the general ledger if the financial statements are to be correct.The purpose is that the sales transactiosn are properly recorded in the accounts receivable. In most engagements, auditors perform some clerical accuracy test such as footing the journals and tracing the totals and details to general ledger and the master file, to check whether there are errors or fraud in the processing of sales transactions. Tracing from the sales journal to the master file is typically done as a part of fulfilling other transaction-related audit objective, but footing the sales journal and tracing the totals to the general ledger are done as separate procedures.