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Sir, the BIGGEST only problem I have in f3. Please help!
I don’t understand what corrections can be made in journal entries while in doubt/error.
And that’s not a huge problem. The main one is when/what are the rules within alterations of ledgers and control accounts???
So I couldn’t answer the following question and didn’t understand entirely the answer because it’s very short and stupid in bpp prkit.
So here is the question:P&Co maintain a receivables ledger control account within the nominal ledger. At 30 November 20×0, the total of the list of individual balances extracted from the receivables ledger was 15800 which did not agree with the balance on the receivables ledger von’t tok account. An examination of the books revealed the following inf, which can be used to reconcile the receivables ledger and the receivables ledger control account.
1. The credit balance of 420 in Ahmed’s payables ledger account had been set off against his account in the receivables ledger, but no entries had been made in the receivables and payables ledger control accounts.
2. The personal account of Mahmood was undercast by 90.
3. Yasmin’s balance of (debit) 780 had been omitted from the list of balances.
4. Thomas’ personal account balance of 240 had been removed from receivables ledger as a bad debt, but no entry had been made in the receivables ledger control account.
5. The January total of 8900 in the sales day book had been posted as 9800.
6. A credit note to Charles for 1000 plus sales tax of 300 had been posted to the receivables ledger control account as 1300 and to Charles’ personal account as 1000.
7. The total on the credit side of Edward’s personal account had been overcast by 125.#13.15 which of these 7 items need to be corrected by journal entries in the nominal ledger?
#13.16 what is the revised total of the balances in the receivables ledger after the errors have been corrected?
#13.17 assuming the closing balance on the receivables ledger control account should be 16000, what is the opening balance on the receivables ledger control account before the errors were corrected?
Please sir help me , it’s the only field I struggle with! I’ve watched the lectures and ‘ve read all the notes…
First (and this is probably due to poor wording by BPP) all a journal entry is, is writing down an entry in words. It is up to use whether we write it in words or not – there is no requirement to do so. So what they should really ask is which corrections require debits and/or credits to be made in the nominal ledger.
1. No entry is needed in the nominal ledger. The payables ledger and receivables ledger are simply ‘notes’ keeping a record for each individual supplier/customer.
2. Again, not entry is needed in the nominal ledger. It is the ‘note’ for Mahmood that is incorrect.
3. Again, no entry in the nominal ledger. It is the list of individuals that is wrong.
4. This does need entering in the nominal ledger because the receivables ledger control account is an account in the nominal ledger. Cr Receivables; Dr Irrecoverable debts expense
5 This does need entering in the nominal ledger because it is the total of the sales day book that is used for the double entry and so it the total is wrong then the entry will have been wrong. So we need to Dr Sales Cr Receivables with 900 (the difference, so as to make it correct)
6 No entry is needed in the nominal ledger because 1300 is the correct amount to enter on the receivables account. The individual account is wrong.
7 No entry is needed in the nominal ledger – it is the individual account that is wrong.
You should now be able to sort out BPP’s answer to the remaining questions.
Anyway I’m having problems with others(( could you give simple general idea of doing it, please!!
for 13:16 you take the total that is given in the question for the receivables balances and add or subtract to correct for 1, 2, 3, 6, and 7.
For 13:17 if the closing balance is 16,000 you work backwards on corrections 4 and 5 to see what the balance would have been before the corrections.
HEY John,
How are you. I’ve similar problem with suspension a/c. Could you please brief me on following situations thanks1 A’s total cash receipts book balance undercasted by $100.
2 A’s Receiveable column in cash receipts book undercasted by$100.
Q1: Will situation 1 or 2 make difference in trial balance.
Q2: Will Receiveable Control account be effected and imbalance the Trial balance.
Q3: which are the possible error in Book of Prime Entry which effects Nominal ledger.
Note: if I’m not wrong “6” types of errors are in “Nominal Ledger” which don’t effect Trial balance and 4 types of errors which effects. But I’m confused about Book of Prime Entry. Thanks
Have you watched the free lectures on Books of Prime Entry?
The trial balance is a list of the balances in the nominal/general ledger.
The figures entered in the nominal/general ledger are the totals from the books of prime entry. If the totals are wrong for any reason then the balances in the nominal ledger will be wrong.
Therefore both of your items will stop the trial balance from balancing and therefore need a suspense account.
I don’t understand your last sentence referring to 6 and 4 types of errors.
i am preparing for my F3 exam and i am stuck on control accounts chapter, My doubt is in this question :
Cash of $50 paid to freddie had been credited to his account, and a cheque paid to james for $250 had been omitted from his ledger.
why do we subtract 250 for the balance of the individual accounts in the reconciliation statement ?
Please help.
I assume that the question said that the cheque paid to James had been omitted from his account in the payables ledger.
On that basis, they will still have been showing 250 as owing to James when it was not actually owing. So they will need to reduce the amount owing to James which will reduce the total owing.
thank you john…. i also wanted to ask you if the beckers study material is good enough for preparations or not ?
You are welcome 🙂
With regard to the Becker material, I have not seen it but since it is approved by the ACCA then it will be good enough.
However, if you are watching all our free lectures (together with our lecture notes), then they provide a complete course and cover everything you need to be able to pass Paper F5 well.You don’t really need any other study material apart from a Revision Kit, which is essential because contains lots of exam-standard questions, and question practice is vital.
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