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A payable ledger control account showed a credit balance of 768420 . the payables ledger 781200
Which of this error could account in full for differenceWhy is yhis answer is not correct?
a contra against a receivable ledger balance of 6390 has been entered on the credit side of payable ledger account.
But in Kaplan book the correct answer is B
The total of discount allowed 28400 was entered to the debit side of the payables ledger control account instead of the correct figure for discount received of 15620
Full question.
A payable ledger control account showed a credit balance of 768420. The payables ledger totalled 781200
Which one of the following possible errors could account in full for the difference.
a) a contra against a receivables ledger debit balance of 6390 has been entered on the credit side of the payables ledger control account.
b)the total of discount allowed 28400 was entered to the debit side of the payables ledger control account instead of the correct figure for discount received of 15620
In the back of the book it is B)
Well that is different from what you typed at first!!! 🙂
A) is wrong because it says that the contra had been entered on the credit side of the payables ledger control account – so this would make the control account balance higher than the total of the ledger accounts
B) is correct because discount allowed should not be in the payables ledge control account – it should be the discount received. so the debit on the control is too big which means the credit balance on the control will be lower than it should be.
if payable had been entered on the credit side – why it means that payable control account balance higher
Please explain it..
The accountant at Co has preaped the following reconcilation beetween the balance of payable ledger control account in the general ledger and the list of balances from supplier/
Balance on general ledger control account 68566
Credit balance omitted from list of balances from payables ledger-127Undercasting of purchase day book -99
Total list of balances 68538
what balance should be reported on co statement of financial position fotr trade payable?
1)why 68538 is not correct answer?
2)control account must equal to supplier acount then why 68566 is not correct answer?Thanks in advance 🙂
If a balance has been missed from the list of balances, then the total cannot be correct. The correct total will be 68538 + 127 = 68665
If the purchase day book has been undercast, the the total entered in the control account will be wrong and so the balance there will be wrong.
To correct it you need to add 99. So the correct total in the control account is 68665Now they agree!
Then, if purchase day book figure undercasted , why we must change on control account not in list of balances?
Because the totals are what are posted in the nominal/general ledger (which is where the control accounts are).
In the payables ledger (where all the individual accounts are held) the individual figures from the purchase day book are entered – the total is irrelevant.
(You might find it useful to watch my free lecture on books of prime entry)
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