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Control Account

TThanh11y ago
question 13.6 in f3 kit: At 30 November 20X0, the total of the list of individual balances extracted from the receivables ledger was $15,800, it is also discovered that: The personal account of Mahmood was undercast by $90. Yasmin's balance of (debit) $780 had been omitted from the list of balances. A credit note to Charles for $1,000, plus sales tax of $300, had been posted to the receivables ledger control account as $1,300 and to Charles' personal account as $1,000. The total on the credit side of Edward's personal account had been overcast by $125 What is the revised total of the balances in the receivables ledger after the errors have been corrected? here is the answer: BALANCES EXTRACTED FROM THE RECEIVABLES LEDGER Total before corrections for errors 15,800 Mahmood 90 Yasmin 780 Charles (300) Edward 125 corrected Balance: 16,495 please explain to me why 300 is deduced in this question, thanks.
John MoffatJohn MoffatTutor11y ago#1
The personal account in the receivables ledger should show the total owing from Charles. Since he has received a credit note for $1300 in total, then $1300 should have been entered on his account to reduce the amount owing. Only $1,000 has been entered, and so to correct it the balance needs reducing by an additional $300. Hope that helps :-)
TThanh11y ago#2
Thank you so much, now i understand. i thought credit note is debit on receivable in this question, so poor.
John MoffatJohn MoffatTutor11y ago#3
You are welcome :-)
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