How to Record DCAA Settled Disallowances
Records the final adjustment to accounts receivable after a DCAA audit finding (Form 1) has been formally settled or adjudicated.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Reserve for Questioned Costs | Debit | 12,000.00 | - |
| Accounts Receivable - Unbilled | Credit | - | 12,000.00 |
💡 Accountant's Note
This entry clears the reserve previously set up for potential audit losses and reduces the receivable balance to reflect the settled (disallowed) amount.
Practitioner & Systems Framework
💻 ERP Architecture
Apply the credit to the specific contract project in the billing module to ensure the 'Unbilled' balance matches the final allowable cost.
⚠️ Audit Flags
Discrepancy between the DCAA final decision letter and the general ledger receivable balance.
📄 Required Documentation
DCAA Audit Report, Settlement Agreement, and Contracting Officer's Final Decision (COFD).
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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