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Assertions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Assertions

  • This topic has 9 replies, 2 voices, and was last updated 3 years ago by Kim Smith.
Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • November 1, 2019 at 7:44 am #551328
    iza1
    Member
    • Topics: 114
    • Replies: 112
    • ☆☆☆

    In mar June 19 published question , no.9 about Poole co

    Why is the answer a ?
    If it’s paid twice , 72168*2 it should be , how is it 156403

    What is a debit note mentioned in option b

    November 1, 2019 at 9:00 am #551342
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6791
    • ☆☆☆☆☆

    Please can you give posts suitable titles that help others (and me) – for example, this could have been “M/J19 Q9”.

    The difference is (72,268) i.e. DR balance in the purchase ledger vs 84,235 CR balance on the statement – so 84,235 – (-72,268) = 84,235 + 72,268 = 156,403

    See here re debit note: https://opentuition.com/topic/sales-and-purchases/

    November 1, 2019 at 1:37 pm #551391
    iza1
    Member
    • Topics: 114
    • Replies: 112
    • ☆☆☆

    Sorry Kim re title.
    I’m a little lost here though.
    Why did you subtract 72168 from 84235.
    Dr balance of 72168 means may be I have paid more as usually payables are credit balances.
    So if supplier is saying I owe him 84235 I already paid 72168 twice Soo…? I’m lost here..

    November 1, 2019 at 2:46 pm #551394
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6791
    • ☆☆☆☆☆

    The difference between 72168 DR and 84235 CR is 156,403. I showed it “minus minus” (i.e. two negatives make a plus).
    The balances themselves have nothing to do with explaining the difference – it could have said 32168 DR and 124235 CR – the difference is still 156,403 so FORGET about “72,168 being paid twice” – this isn’t what’s happened and it wouldn’t explain the difference (if 72,168 was paid twice the difference would be 72,168!)

    Consider option 1 starting with the balance per supplier’s (i.e. Poole’s) statement 84,235:
    if Chester paid 156,403 which wasn’t owing, the balance would become 84,235 due to Poole, less 156,403 paid to Poole = 72168 now owed back to Chester

    Consider option 2 – a debit note has the “opposite” effect of an invoice – if anything is posted to “wrong side” of an account, the error is TWICE the amount mis-posted so the difference arising from a misposting of 156,403 would be 312,806 (so cannot account for difference)

    Consider option 3 – this is just a “red herring” – if the invoice is processed (regardless of the timing of the receipt of goods) there would be no difference.

    November 3, 2019 at 7:44 pm #551506
    iza1
    Member
    • Topics: 114
    • Replies: 112
    • ☆☆☆

    Hi sir
    I’m still not able to get the second one.
    I understood what debit note is
    But re the misposting I can’t seem to follow it ?

    November 4, 2019 at 8:01 am #551523
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6791
    • ☆☆☆☆☆

    Suppose a company receives a purchase invoice $1,000 and posts it to the CR side of an expense account – it should have been debited, so the error on this account (i.e. the difference between what the balance should be and the recorded balance) is $2,000 (i.e. 2 x).

    November 4, 2019 at 9:57 am #551537
    iza1
    Member
    • Topics: 114
    • Replies: 112
    • ☆☆☆

    Agreed. But our option is that the invoice of $156403 is posted as a debit note.
    They should raise a debit note right

    November 4, 2019 at 10:30 am #551539
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6791
    • ☆☆☆☆☆

    An invoice should be posted as an invoice not as a debit note which would be on the opposite side of the account.

    November 4, 2019 at 2:13 pm #551546
    iza1
    Member
    • Topics: 114
    • Replies: 112
    • ☆☆☆

    THats the thing.. thank you thank you…….

    November 4, 2019 at 3:27 pm #551549
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6791
    • ☆☆☆☆☆

    Phew! You’re welcome!

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Viewing 10 posts - 1 through 10 (of 10 total)
  • The topic ‘Assertions’ is closed to new replies.

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