Answer:
The auditors don't know what they are doing. You are permitted to include items such as this in the payment schedule, the Total of Payments must equal the sum of the payments, but nothing says it must also equal the Amount Financed plus the Finance Charge. In order to audit such a disclosure, you must eliminate the amounts from the payments that are neither repayment of the "amount financed" nor collection of the "finance charge."
First published on BankersOnline.com 7/21/03